31 October 2013, News Wires – ExxonMobil saw its third-quarter earnings tumble by 18% on weaker refinery margins as it boosted capital expenditure.
The US supermajor reported net income of $7.87 billion, versus $9.57 billion a year earlier, as total revenue fell 2% year on year to $112.34 billion while capital and exploration expenditure increased 15% to $10.5 billion in line with spending plans.
However, the per-share earnings figure of $1.79 was still higher than analysts’ estimate of $1.77 in a Reuters poll.
Revenue was hit by increased refining capacity in the industry that cut margins, despite boosting earnings from its upstream business by $740 million to $6.7 billion on increased production and higher realisations for liquids and gas output.
The company’s downstream earnings were down by a hefty $2.6 billion on the previous year to $592 million, mainly due to weaker refinery margins that accounted for a drop of $2.4 billion.
However, oil and natural gas output rose 1.5%from a year earlier to 4 million barrels oil equivalent per day, marking the first year-on-year production increase since the second quarter of 2011.
“Production of oil and natural gas increased from a year earlier as new projects were brought online and maintenance-related downtime decreased,” said chief executive Rex Tillerson.
Energy analyst Brian Youngsberg of US firm Edward Jones told Reuters: “”It does show that they are hopefully making some progress stemming the decline that they’ve shown the last couple of years.”
Output was boosted by start-up of oil and gas production from the Kipper Tuna Turrum project in Australia, as well as accelerated output from Nigeria and Canada.
The company is meanwhile looking to boost exploitation of Canada’s oil sands with the acquisition of ConocoPhillips’ stake in the Clyden lease south of Fort McMurray, Alberta.
Tillerson said ExxonMobil would “maintain a long-term perspective on our business with a relentless focus on operational excellence and disciplined investing”, having generated cash flow from operations and asset sales of $13.6 billion in the latest quarter.