Exxon takes a hit, but it could have been worse

Exxon Profits Fall

America's largest oil company, Exxon Mobil Corp., has posted a 23 percent fall in profits but the result was slightly better than Wall St. feared as losses in its refining arm were offset by a boost in exploration thanks to a hike in natural gas projects.

Exxon made a net profit of $6.05 billion in the fourth quarter of 2009, compared with the $7.82 billion it made in the same period in 2008. Weak fuel demand in the global economic slowdown hurt the company's refining business much like pretty much every other energy company out there.

Exxon's oil and natural-gas production climbed 1.6 percent to the equivalent of 4.18 million barrels of crude a day, helping Exxon take advantage of the biggest yearly gain in oil prices since 1999. The recession eroded demand for motor fuels, leading to losses of $2 million a day at Exxon's refineries. Full-year profit fell below $20 billion for the first time since 2002.

"Given what a drag refining has been on earnings, these results were better than I expected," said Gianna Bern, president of Brookshire Advisory & Research Inc. in Flossmoor, Illinois, who predicted per-share profit of $1.11.

"Continue investing in new energy supplies"

"The increase in production is very encouraging and it shows this company has laid the groundwork for long-term growth," he added.

Exxon chairman Rex Tillerson said: "Our financial strength provided us with the foundation to continue investing in new energy supplies to help meet global energy demand and to fuel economic growth."

"Capital and exploration spending was $27.1 billion in 2009, another record year, and in line with our longer-term plan."

Exxon were helped in a big way by its wells in the US, Russia, the Middle East and Canada where, in the last three months of 2009, the company saw an impressive hike in oil being pumped.

Last week, Chevron reported a 37 percent drop in quarterly profit. Fellow oil giants BP and Royal Dutch Shell, not wanting to feel left out but hoping they can surprise Wall St. like its rival Exxon, also have figures out later this week.

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