Exxon profit buoyed by higher oil prices

City A.M. Reporter
Exxon Mobil yesterday said first-quarter profit rose 38 per cent on higher crude prices and output, but the results missed Wall Street expectations as recently enacted US healthcare legislation took a toll on results at the largest US oil company.

“Our results reflect higher crude oil realisations and stronger chemical margins while the downstream industry margins remained weak,” Rex Tillerson, Exxon’s chief executive, said in a statement.

Benchmark US oil prices averaged nearly $79 a barrel in the first quarter, about $3 above the quarter before and sharply higher than the $43 average of the first quarter of 2009.

Exxon’s profit in the quarter was $6.3bn, or $1.33 per share, compared with $4.55bn, or 92 cents per share, a year earlier.

Exxon also said recently enacted US healthcare legislation hurt earnings by $200m, or about four cents per share. Wall Street analysts had expected Exxon to report a profit of $1.41 per share, according to Thomson Reuters.

Jason Gammel, oil analyst at Macquarie Research, characterised Exxon’s first-quarter profit as a “pretty big miss”, and attributed the bulk of the shortfall to the Exxon’s accrual for the healthcare legislation.

The company’s oil equivalent production rose 4.5 per cent from a year ago, fueled by the company’s liquefied natural gas (LNG) projects in Qatar, it said.

“The production numbers looked great, I was looking for 2.5 per cent growth,” Gammel said.

Revenue rose to $90.25bn from $64.03bn. Analysts had expected revenue of $96.4bn.