Exxon Earnings Cannot Overcome Jitters Over Prices, Production

For the full year, Exxon posted EPS of $7.60 on revenues of $411.94 billion, compared with EPS of $7.37 and revenues of $438.26 billion in 2013. Analysts were looking for EPS of $7.48 on revenues of $413.06 billion.

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Profits in the fourth quarter fell 21%, from $8.4 billion in the year-ago quarter to $6.6 billion due to lower commodity prices in the upstream division and higher maintenance costs in the downstream group. These were partially offset by improved margins in the chemicals business. For the full year, profits were flat at $32.52 billion.

Exxon’s worldwide production of both oil and natural gas was lower year-over-year for the quarter. Global liquids production slipped by 53,000 barrels a day to 2.2 million barrels. Worldwide natural gas production fell by 653 million cubic feet a day to 11.2 billion cubic feet per day. In barrels of oil equivalent, production fell by 3.8%.

Capital spending in 2014 totaled $38.54 billion, down about 9.3% from $42.49 billion in 2013.

The company’s CEO said:

ExxonMobil’s results illustrate the value of our proven business model that integrates upstream, downstream, and chemical businesses. Our balanced portfolio uniquely positions ExxonMobil to deliver superior results throughout the commodity price cycle.

Downstream earnings (refining and marketing) fell to $497 million globally in the fourth quarter, compared with earnings of $916 million in the year-ago quarter. In the United States, downstream operations posted a loss of $1 million. Refined product sales were essentially flat at 5.84 million barrels a day.

Exxon returned $23.6 billion to shareholders during the year in dividends and share buybacks. The company said that its distribution yield was 5.4% for 2014.

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The company did not provide guidance in its press release, but analysts are expecting first-quarter EPS of $0.85 on revenues of $51.24 billion, compared with EPS of $2.10 and revenues of $106.77 in the first quarter of 2014.

Exxon’s shares traded down fractionally in Monday’s premarket, at $87.23 in a 52-week range of $86.03 to $104.76. Thomson Reuters had a consensus analyst price target of around $95.40 before the report.