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Exxon Mobil Net Income Declines as Quarterly Output Slips

Exxon Mobil Corp. (XOM), the world’s largest oil producer by market value, said fourth-quarter profit dropped the most in four years as it pumped less natural gas from wells and energy prices stagnated.

Net income fell 16 percent to $8.35 billion, or $1.91 a share, from $9.95 billion, or $2.20, a year earlier, the Irving, Texas-based company said in a statement today. Exxon was expected to post per-share profit of $1.91, based on the average of 18 analysts’ estimates compiled by Bloomberg.

Exxon’s global output dropped for the ninth time in 10 quarters, disappointing investors who had been encouraged when the company snapped its losing streak during the July-to-September period, said Brian Youngberg, an analyst at Edward Jones & Co. Exxon hasn’t sustained output growth for two consecutive quarters since the first half of 2011.

“Production fell again so the question becomes,‘Have they already lost the momentum they gained in the last quarter,’” Youngberg said in a telephone interview from St. Louis today.

Sales declined 3.3 percent to $110.86 billion. Exxon’s shares fell 1.2 percent to $93.99 at the close in New York.

Exxon pumped the equivalent of 4.216 million barrels of crude a day during the final three months of 2013, the lowest fourth-quarter output since 2010, according to data compiled by Bloomberg.

Gas Declines

A 1.5 percent rise in crude production, led by new wells in the Western Hemisphere, was more than canceled out by a 5.2 percent decline in gas output, the company said. Gas supplies fell in every region of the world where Exxon does business except for Canada and South America, according to the statement.

Brent crude, the benchmark for more than half the world’s oil, declined 0.7 percent to an average of $109.35 a barrel during the final three months of last year. U.S. natural gas rose 8.8 percent to $3.85 per million British thermal units. West Texas Intermediate crude, the bellwether U.S. oil, climbed 11 percent to $97.61 a barrel.

Refining and marketing profit tumbled 48 percent to $916 million. Exxon’s chemical earnings dropped 5 percent to $910 million, according to the statement.

Exxon earns about three-quarters of its global net income outside the U.S., according to data compiled by Bloomberg.

Chairman and Chief Executive Officer Rex Tillerson is seeking to revive production growth and limit costs amid shrinking access to the world’s remaining untapped petroleum reservoirs.

Exxon’s majority-owned Canadian subsidiary, Imperial Oil Ltd. (IMO), said profit declined to C$1.056 billion ($946 million), or C$1.24 a share, from C$1.076 billion, or C$1.26, a year earlier. Record earnings from processing crude into fuels were more than offset by slumping prices received for Imperial’s western Canadian crude, the Calgary-based company said in a statement today.

Imperial fell 0.6 percent to C$45.52 in Toronto.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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