Exxon beats estimates as refining profit doubles

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Exxon Mobil Corp. posted higher-than- expected profit as soaring margins on processing oil into fuels blunted the impact of collapsing crude markets.
Third-quarter net income fell to $4.24 billion, or $1.01 a share, from $8.07 billion, or $1.89, a year earlier, Irving, Texas-based Exxon said in a statement.
Per-share profit was 13 cents higher than the 88-cent average of 21 analysts’ estimates collected by Bloomberg, the sixth time in seven quarters that Exxon surpassed expectations.
Profit at the company’s refineries doubled to $2.03 billion, led by gains outside the US, according to the statement.
The 50 percent plunge in international crude prices slashed production costs at Exxon’s plants.
Brent crude futures fell to a third-quarter average of $51.30 a barrel from $103.46 a year earlier, according to data compiled by Bloomberg.
Exxon’s US oil and natural gas wells lost almost $5 million a day during the quarter.
US gas dropped 31 percent to a quarterly average of $2.735 per million British thermal units as output from shale fields from the Rocky Mountains to Appalachia continued to overwhelm demand for the fuel.
Exxon doesn’t foresee any charges in the near future related to restructuring, said Jeff Woodbury, vice president of Investor Relations.
Exxon has lost 11 percent of its market value this year, on track for the worst annual performance since 2009.
Unlike some smaller, more-indebted competitors, Exxon hasn’t reduced dividend payouts and has sought to conserve cash in other ways: postponing the riskiest and highest-cost speculative projects and focusing on oil and gas developments that’ll deliver near- term cash flow.
Chairman and Chief Executive Officer Rex Tillerson was among the first oil executives to curb spending as the free-fall in oil prices began more than a year ago.
After lowering cash outlays by 9.3 percent in 2014, this year’s spending is on pace to be below the full-year 2015 budget.
Tillerson, who has been working in the oil industry since the mid 1970s, has been pessimistic about the prospects for an imminent rebound.
In April, he told a Houston energy conference that excess supplies and the depressed prices they create will persist “for the next couple of years” at least.
Exxon has been expanding its holdings in domestic oil provinces such as Texas and North Dakota as part of a plan to double crude output from US shale by the end of 2017.
As a result of a buying spree that began in early 2014, the company now controls drilling rights to 1.5 million acres in the Permian formation beneath Texas and New Mexico, more than twice the size of its holdings in Iraq or the UK sector of the North Sea.

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