Exxon Mobil Corp (XOM.N) said on Friday third-quarter profit fell 47 percent on low crude prices but results were better than expected, helped by higher profit in the oil company’s refining business.
Crude prices have fallen more than 50 percent from last year’s high above $100 a barrel. While the crude decline hurt Exxon’s largest oil and gas business, it also boosted profit margins in refining by lowering feedstock costs.
“International refining was the surprise that was greater-than-anticipated,” said Brian Youngberg, senior oil analyst at Edward Jones. “Refining is the sweet spot for the integrateds this quarter. It reflects their scale and breadth of operations.”
To weather the downturn, many of Exxon’s peers, including U.S. rival Chevron Corp (CVX.N), are slashing jobs and capital spending.
But the world’s largest publicly traded oil company is so far keeping its budget forecast intact and plans no restructuring charges, Jeff Woodbury, Exxon’s head of investor relations, told analysts on a conference call.
In 2015, Exxon expects to spend $34 billion, and less than that in the next two years. Still, Woodbury said spending so far this year is tracking lower than planned, so it is reasonable to conclude that the final number will come in below that forecast, he said.
The company will issue its latest capital plan in March, Woodbury said.
The Irving, Texas, company posted profit of $4.24 billion, or $1.01 per share, compared with $8.07 billion, or $1.89 per share in the same quarter a year earlier.
Analysts on average had expected a profit of 89 cents per share, according to Thomson Reuters I/B/E/S.
Refining profit nearly doubled from a year earlier to $2 billion in the third quarter, with Exxon’s international refining unit turning in better-than-expected earnings of $1.5 billion.
Earnings at Exxon’s exploration and production business fell $5.1 billion to $1.4 billion.
Oil and gas output increased 2.3 percent from a year earlier to 3.9 million oil-equivalent barrels per day (mboed). Exxon is still on track for output totaling 4.1 mboed for the full year, Woodbury told analysts.
Shares of Exxon were up 0.8 percent at $82.90 on Friday afternoon. So far this year, the stock has fallen 10 percent.