Exxon share price down, tops expectations despite lower oil prices

Exxon Mobil Corp announced on Monday it suffered a 21% reduction in quarterly profits, less than projected, as performance of the worlds biggest oil company was boosted by tax benefits and a compensation from Venezuela.

Post-tax earnings for the three months ended December 31 stood at $6.57 billion, down compared to the $8.35 billion reported in the fourth quarter of 2013. Results were dented by falling oil, gas prices and lower margins at the companys US refineries.

Revenue dropped to $87.28 billion versus $110.86 billion, while earnings per share were $1.56, down compared to $1.91 a year earlier. Analysts polled by Thomson Reuters had projected revenue of $87.6 billion with per-share earnings of $1.34.

In contrast to its core business, Exxons oil refining division benefits from falling oil prices. However, the unit was hit by larger than projected maintenance expenses in addition to the lower profits from its US refining operations.

The US downstream operations reported a record of $1 million loss, compared to a profit of $597 million in the last quarter of 2013. Meanwhile, non-US refineries stated a 56% increase in profits to $498 million.

A strong contributor to results was the companys chemicals division, which generated $1.23 billion, 35% up year-on-year, in the recent quarter, boosted by higher margins and lower feedstock costs.

Exxon also reported a 19% drop in earnings to $5.5 billion from its operating business, fueled by lower commodities prices. Production also decreased in the quarter by 3.8%. Output was hurt by the expiration of the Abu Dhabi onshore concession, excluding the event, production fell 0.7%, Exxon said.

Additionally, results benefited from a $1 billion non-cash effects including the delay of some US income tax items and a favorable arbitration ruling from a World Bank tribunal in October. Exxon was compensated for the expropriation by Venezuelas government of two heavy oil projects in 2007.

Exxon also slashed its share repurchasing program to $1 billion for the first three months of 2015. The company spent $3 billion on buybacks during the fourth quarter of last year.

“Our balanced portfolio uniquely positions Exxon Mobil to deliver superior results throughout the commodity price cycle,” said Chief Executive Officer Rex Tillerson.

Exxon lost 0.18% on Friday and closed at $87.42 in New York. On Monday to stock edged up 0.64% to $87.98 at 15:49 GMT, marking a one-year decrease of 4.47%. The company is valued at $370.18 billion.

According to CNN Money, the 20 analysts offering 12-month price forecasts for Exxon have a median target of $94.50, with a high estimate of $115.00 and a low estimate of $82.00. The median estimate represents a 7.45% increase from the last close price.