Jan. 30 (Bloomberg) -- Exxon Mobil Corp. and Chevron Corp., the biggest U.S. oil companies, exceeded analyst earnings estimates as increased fourth-quarter refining profits blunted the impact of a record drop in crude prices.

Net income at Exxon Mobil fell 33 percent to $7.82 billion, or $1.55 a share, 8 cents higher than the average of analyst estimates compiled by Bloomberg, according to a statement today by the Irving, Texas-based company. Chevron, based in San Ramon, California, said its profit rose less than 1 percent to $4.9 billion. Excluding a gain on an asset exchange, profit was about $2.14 a share, 32 cents higher than analysts estimated.

Chevron’s refining earnings jumped 10-fold to $2.08 billion. Exxon Mobil had a gain of more than 6 percent to $2.41 billion as profit margins in overseas markets widened. A collapse in petroleum prices, which cut profits from oil and natural-gas wells, reduced the cost of making gasoline, diesel and other fuels.

“It was an impressive quarter in a difficult environment,” said Douglas Ober, who manages $540 million, including Exxon and Chevron shares, as chairman of Petroleum & Resources Corp. in Baltimore. “The companies that have significant overseas refining can capitalize because outside the U.S., diesel demand has remained relatively strong.”

Exxon Mobil, which ranks third in U.S. refining capacity, is the biggest fuel maker worldwide. Like Exxon Mobil, Chevron has more refineries outside the U.S. than inside its home country.

Exxon Mobil fell 52 cents to $76.48 in New York Stock Exchange composite trading, and Chevron dropped 10 cents to $70.52. Both stocks rose more than 2 percent this morning before falling along with other U.S. equities.

Shell, ConocoPhillips

Royal Dutch Shell Plc, Europe’s largest oil company, yesterday reported its first loss in a decade, at $2.81 billion. Occidental Petroleum Corp., based in Los Angeles, said yesterday that its fourth-quarter profit slid to $443 million, a five-year low. Earlier this week, New York-based Hess Corp., the No. 5 U.S. oil company, posted its first loss in six years.

Also this week, Houston-based ConocoPhillips, the third- biggest U.S. petroleum producer, posted the largest loss in its history, at $31.8 billion, on costs recorded to reflect a decline in the value of acquired assets.

London-based BP Plc, the second-biggest oil company in Europe, is scheduled to report earnings next week.

Ted Harper, who helps manage $9 billion at Frost Investment Advisors in Houston, said the Exxon Mobil and Chevron results may bode well for the ability of major oil companies to cope with the global recession.

Parking Place

“It signals that these guys operated relatively well in what is probably going to be the first of several difficult quarters,” Harper said. “You’ve got with these names a pretty decent place to park some money for the time being.”

U.S. oil futures tumbled 56 percent in the fourth quarter, the biggest decline since the contracts began trading in 1983, as demand for transportation and factory fuels slumped. Gas futures, which slid 24 percent in the quarter, continue to fall this year as new wells in Louisiana, Texas and Arkansas create a surfeit.

Exxon Mobil said it will repurchase $7 billion in shares during the current quarter after spending $32 billion on buybacks in 2008. Chief Executive Officer Rex Tillerson plans to boost capital spending by as much as $5 billion this year to expand operations.

“It’s odd to think of commodity-based companies as a safe haven in a poor economy, but given their cash flow and Exxon’s promise to do $7 billion in buybacks in the first quarter, it’s pretty reassuring to an investor,” said David Foley, who helps oversee $2 billion, including Exxon Mobil and Chevron shares, at Estabrook Capital Management in New York.

Production Falls

Exxon Mobil’s production fell 3.3 percent to the equivalent of 4.1 million barrels of oil a day. Chevron’s output from oil and gas wells dropped 2.7 percent, its ninth straight decline, after hurricanes in the Gulf of Mexico damaged platforms and disrupted pipelines.

For the full year, Exxon Mobil’s net income rose 11 percent to a record $45.2 billion, or $8.69 a share. Oil futures touched an all-time high above $147 a barrel in July. Exxon Mobil’s and Chevron’s combined revenue for 2008 exceeded the gross domestic products of all but 16 of the world’s nations.

Fourth-quarter revenue at Exxon Mobil dropped 27 percent to $84.7 billion, according to the company’s statement. Chevron said its revenue fell 26 percent to $45.2 billion.

To contact the reporters on this story: Joe Carroll in Houston at jcarroll8@bloomberg.net; David Wethe in Houston at dwethe@bloomberg.net.

Last Updated: January 30, 2009 16:18 EST