Energy

Exxon Mobil beats earnings expectations as profits more than double from last year

Key Points
  • Exxon Mobil posted a strong beat on earnings as oil prices rose and the company cut costs.
  • Revenue slightly missed analysts' expectations.
  • Cash flow from operations — a key financial metric in the energy industry — improved significantly from the year-ago period.
John Gress | Getty Images

Exxon Mobil beat Wall Street's expectations as first quarter earnings more than doubled profits in the year ago period on rising oil prices and cost cutting.

Shares were up 1.6 percent following the release.

The world's most valuable publicly traded energy company posted profits of $4 billion, or 95 cents per share, for the quarter, compared with analysts' EPS estimates for 85 cents.

The Irving, Texas-based oil giant earned $1.8 billion, or 43 cents a share in the year ago period.

"Our results reflect an increase in commodity prices and highlight our continued focus on controlling costs and operating efficiently," Chairman and CEO Darren Woods said in a statement.

The integrated energy company brought in $63.3 billion in revenues, missing expectations for $64.7 billion.

Exxon's cash flow generated by its operations — a key metric in the oil and gas industry —were $8.2 billion, significantly better than $4.8 billion in the first quarter of 2016.

Meanwhile, costs fell as Exxon reduced its capital and exploration spending by $4.2 billion, down 19 percent over the past year.

Earnings in Exxon's upstream exploration and production segment improved to $2.3 billion as the company fetched a higher price for its products.

Downstream fuel refining and marketing operations earned $1.1 billion, a slight jump from the year-ago period. Higher profit margins among other factors underscored the improvement.

Profits in Exxon's chemicals business fell by $184 million from last year to $1.2 billion, hurt by weaker profit margins and foreign exchange factors.

Exxon announced significant investments in its U.S. drilling and refining operations in the first quarter.

In January, it doubled its oil and gas holdings in the southern Permian Basin with a $5.6 billion purchase. Last month, it said it would invest $20 billion in its Gulf Coast chemical and oil refining facilities over the next five years.

The quarter also saw Exxon reduce its overall oil reserves by 3.3 billion barrels, as persistently low oil prices forced the company to take off its books 3.5 billion barrels of bitumen reserves at its Alberta, Canada oil sands project. This came after Exxon took a $2 billion impairment in the previous quarter related to a downward revision of its U.S. reserves.

On Wednesday, Exxon announced a 77 cents quarterly dividend, a two cents increase from last quarter.