Cost-cutting and higher prices for its oil and gas helped the company beat the expectations of Wall Street analysts. Shares rose slightly in trading before the opening bell.
Exxon earned $9.1 billion in the first three months of the year on revenue of $106.77 billion. During the same period last year, Exxon earned $9.5 billion on revenue of $108.36 billion.
On a per-share basis, Exxon earned $2.10, compared with $2.12 last year. Analysts expected earnings of $1.88 per share, on average, according to FactSet.
Exxon, like its Big Oil peers, has been working to reduce costs to offset the increase in spending needed to find and develop large new oil and gas projects that can deliver enough production to replace natural declines in current fields.
“These companies are spending a lot of money and they aren’t seeing the returns,” said Brian Youngberg, an analyst at Edward Jones.
It is the fourth quarter in a row that Exxon’s profit has fallen compared with the year before.
But Youngberg described Exxon’s results as “a strong start to the year” in part because of its ability to cut costs.
Exxon’s capital and exploration expenditures fell 28 percent in the first quarter, which helped deliver higher profits even though oil and gas production fell 5.6 percent.
“Like its peers, (Exxon) is growth-challenged on the production front,” Youngberg said. “Investors want these companies to focus less on volume growth and more on profitability but in reality they have to strike a balance.”
Exxon’s oil production fell 2 percent to 2.1 million barrels per day from 2.2 million barrels per day. Natural gas production fell 9.1 percent.
Earnings from oil and gas production rose, however, because natural gas prices rose, the company produced relatively more higher-profit crude oil, and Exxon controlled costs.
Refining results were hurt by higher prices for raw materials such as crude oil and natural gas and relatively lower prices for petroleum-based fuels and products such as diesel, gasoline and chemicals.