Posted: July 27, 2018 8:00 pm Updated: July 27, 2018 9:01 pm
DALLAS (AP) – Rising oil prices led Exxon Mobil Corp. in the second quarter. an increase of 18 percent to $ 3.95 billion, but Friday's results fell short of Wall Street expectations and equities fell nearly 3 percent.
The price of international reference crude increased by more than 50 percent compared to the previous year. But Exxon's oil and gas production declined 7 percent, so higher prices were not fully utilized.
Rival Chevron Corp. In contrast, production increased 2 percent, doubling second-quarter earnings more than a year ago
"Second-quarter results were well below market expectations," said Neil Hansen, vice president of investor relations at Exxon Conference call with analysts too. He said the company is making progress on key investments that would pay off in the long run.
Exxon Strongly Boosted Capital Expenditures ̵
Neil Chapman, Senior Vice President of Exxon Exploration and Production, said the second quarter was the low point and production would rise over the rest of the year.
Exxon now expects that Chapman's March forecast will not be met – that production in 2018 would be the same as last year. Exxon predicted on Friday that it will produce 3.8 million barrels per day including natural gas, compared to 4 million barrels per day in 2017.
Chapman's reasons for failing included an earthquake involving operations in Papua New Guinea and the company's withdrawal to natural gas in the US because of relatively low prices. He said the company would focus on the most profitable production.
Exxon's oil production has dropped in three consecutive quarters and in five of the last seven quarters, compared to the previous year's results. Until mid-2016, the company regularly increased production.
Exxon's second-quarter earnings were 92 cents a share. According to a survey by Zacks Investment Research analysts searched for $ 1.26 per share. Exxon does not correct the results due to one-off events, such as the sale of assets, which were $ 307 million for the quarter.
Sales increased by 27 percent to $ 73.50 billion despite the decline in oil and gas production. Highlights in Exxon's portfolio included the Permian Basin in Texas and the Bakken field in North Dakota, where production increased 30 percent.
Investment increased by 69 percent to $ 6.63 billion and in Indonesia.
The Irving, Texas-based company spends most of its earnings on shareholder dividends – $ 3.5 billion. However, the value of the Exxon shares has risen only a few dollars since it bottomed in September 2015, even though the price of crude has since risen more than 50 percent.
Exxon shares fell $ 2.32, or 2.8 percent, to $ 81.92. That dropped 2.1 percent this year – starting the day at less than 1 percent in 2018.
This story has been updated to correct the spelling of Papua New Guinea.