The biggest oil company by market value, Exxon Mobil Corp., has increased its production for the first time in more than two years despite the fact that it has been unable to increase its net income which has slumped 18 percent. Whereas the oil and natural gas production of the company increased 1.5 percent to the equivalent of 4.02 million barrels a day, it has been hurt a lot by diminishing costs.
Exxon Mobil Corp. claims that though production increased slightly, it made significantly less money at refining as its third-quarter net income stood at $7.87 billion, or $1.79 a share which when compared with $9.57 billion, or $2.09, a year earlier is a drop of 2 percent to $112.37 billion. The company reports that it is its second-smallest quarterly profit since mid-2010 which is better than its second-quarter earnings of $6.86 billion though.
Performance Still Better than Expected
Despite a fall in the revenue, Exxon Mobil Corp. was able to meet the expectations which were quite low. Whereas the company’s earnings for finding and drilling for oil and gas improved from $740 million to $6.7 billion, net income fell to $7.87 billion or $1.79 a share, from $9.57 billion, or $2.09.
Owing to its better output, Exxon was the biggest gainer in the Dow Jones Industrial Average of 30 blue-chip stocks in yesterday’s trading where its shares rose 0.9 percent to $89.62 at the close in New York even when the sales declined by 2.4 percent to $112.4 billion. The company is willing to enhance its production further amidst the dwindling cost.
Lower Oil Prices Hurting Revenue
Whereas returns from oil and gas sales rose 12 percent to $6.7 billion and chemical profit climbed 30 percent to $1.03 billion, Exxon Mobil Corp. is quite worried about the perennial lower costs which are incurring it losses e.g. its profit from processing crude into fuels fell to $592 million during the quarter from $3.19 billion a year earlier.
Oil sands development in western Canada has been a high point for the company. Its plants at Joliet, Illinois; Baton Rouge, Louisiana; and Sarnia, and Ontario are producing record output. The company vice president of investor relations, David Rosenthal, says that during a conference call the company aims to further the production at its oil sand plants.
In similar opinion, Exxon Chairman and Chief Executive Officer Rex Tillerson is mulling a plan to revive production growth and curb cost increases when the dwindling energy prices amidst stagnant energy demand in the world’s largest economy is incurring losses for it.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org