The extraordinary full-year profit wasn't a surprise given crude's triple-digit price for much of 2008, peaking near an unheard of $150 a barrel in July. Since then, however, prices have fallen roughly 70% amid a deepening global [image-nocss] economic crisis. In the fourth quarter alone, crude tumbled 60%, prompting spending and job cuts in an industry that was reporting robust, often record, profits as recently as last summer.
With piles of cash and diversified operations, the majors like ExxonMobil have fared better than many smaller oil and gas companies, but Friday's results show no one is completely insulated from the ongoing malaise, said AP.
Irving, Texas-based ExxonMobil said net income slid sharply to $7.8 billion, or $1.55 a share, in the October-December period. That compared with $11.7 billion, or $2.13 a share, in the same period a year ago, when Exxon set a U.S. record for quarterly profit. It has since topped that mark twice, first in last year's second quarter and then with earnings of $14.83 billion in the third quarter. Revenue in the most-recent quarter fell 27% to $84.7 billion.
The nation's second largest oil company, San Ramon, Calif.-based Chevron Corp., reported profits of $4.9 billion for the fourth quarter, though revenues slid 26% with oil prices in sharp decline. It earned $2.44 per share in the three months ended December 31. For the full year, Chevron made $23.93 billion, or $11.67 per share, compared with $18.69 billion, or $8.77 per share, in 2007.
"Fourth-quarter earnings for our downstream business improved as the lower cost of crude-oil feedstocks used in the refining process helped boost margins on the sale of gasoline and other refined products," said chairman and CEO Dave O'Reilly. "Lower quarterly profits for our upstream operations reflected a sharp decline in crude-oil prices from a year ago."
The industry went into retrenchment toward the end of the year with demand falling.
As expected, ExxonMobil's bottom line took a beating from its exploration and production arm, where net income fell 31% to $5.6 billion. The culprit: lower crude prices, which the company said decreased earnings by $3.2 billion in the fourth quarter alone.
The company, which produces about 3% of the world's oil, said overall output fell 3% in the most-recent period, a troubling trend in previous quarters. ExxonMobil, which generates more than two-thirds of its earnings from oil and gas production, said production-sharing contracts and OPEC quotas contributed to its lower output.
Results were better at its refining and marketing unit, where earnings rose 6% to $2.4 billion as higher margins overcame costs related to last summer's hurricanes and other factors.
For the full year, ExxonMobil's profit amounted to $8.69 a share, versus $7.28 a share a year ago.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.