Exxon Mobil beat earnings forecasts on Tuesday as revenues increased, though the company took a $2 billion impairment charge, mostly due to lowering the value of some of its U.S. gas assets.
Excluding one-time items, Exxon reported a fourth-quarter profit of 90 cents a share, versus Wall Street expectations of 70 cents a share.
Results for the Irving, Texas-based oil giant were helped by belt-tightening throughout 2016. However, persistently low oil prices and weaker profit margins in Exxon's refining business weighed on earnings for the full year.
"Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge," Chairman and CEO Darren Woods said in a statement.
Shares of Exxon slipped about 1 percent Tuesday.
Evercore analyst Doug Teresson said many market watchers were focused on the charge. Including that impairment, Exxon would have missed profit forecasts.
"The market did view the result negatively because they missed the headline number, but that's really only because of ... impairments for Exxon, which are non-recurring. And so the clean results were actually similar to consensus, but they were just messy," he told CNBC's "Fast Money: Halftime Report."
Excluding that charge, Exxon reported fourth-quarter earnings of $3.7 billion, or 90 cents a share. In the period a year ago, it reported earnings of $2.8 billion, or 67 cents a share.
Revenues for the most recent quarter were $61.01 billion, compared with expectations of $62.28 billion.
Exxon said it will increase its 2017 capital spending program, which includes exploration, to an estimated $22 billion. In 2016, capital spending fell 38 percent to $19.3 billion.
Fourth-quarter earnings fell from a year ago in all three of the company's major segments: exploration and production, refining and chemicals.
The $2 billion impairment resulted from the company's review of its reserves. Exxon determined that some of its U.S. assets' future cash flows no longer exceeded their carrying value. These were primarily in the Rockies.
Exxon warned last quarter it would have to revise the amount of unproduced resources it holds if oil prices remained low through the end of the year. In the current price environment, the resources would no longer qualify as proven reserves under Securities and Exchange Commission rules, the company said at the time.
Liquid petroleum products fetched a higher price than they did a year ago. That was partially offset by weaker profit margins in Exxon's refining business.
Integrated oil companies such as Exxon have seen their refining margins shrink as the price of crude oil, the raw material for many fuels, stabilizes above $50 a barrel. Throughout much of the oil price downturn that began in 2014, low crude costs boosted refining margins.
Exxon's cash flow generated by its operations — a key metric in the oil and gas industry — improved significantly from last year. Cash flow from operations was $7.4 billion in the fourth quarter, up from $4.3 billion a year ago.
Cash flow from asset sales was also higher, hitting $2.1 billion, versus about $800 million in the fourth quarter of 2015.
Last week, the company announced a dividend of 75 cents, unchanged from the third quarter.
Correction: This story has been updated to reflect that Exxon Mobil beat earnings forecasts, excluding the $2 billion charge.