Oil companies Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) on Friday reported financial results for the third quarter that beat analysts' estimates, helped by strong results at their refining segments that helped offset the impact of lower production as well as crude oil prices.
Exxon Mobil reported a 3 percent increase in profit for the third quarter from last year, reflecting higher refining margins as well as improved operations at its chemical business.
These helped offset the impact of lower production and realized crude oil prices. Both revenue and earnings per share for the quarter beat analysts' expectations.
Irving, Texas-based Exxon Mobil reported net income for the third quarter of $8.07 billion or $1.89 per share, up from $7.87 billion or $1.79 per share in the prior-year quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.71 per share in the quarter. Analysts' estimates typically exclude one-time items.
However, total revenues and other income for the quarter declined 4 percent to $107.49 billion from $112.37 billion in the same quarter last year. Analysts were looking for revenue of $105.51 billion.
Exxon Mobil's upstream, or exploration and production earnings for the quarter declined 4 percent from the year-ago quarter to $6.42 billion, primarily reflecting lower natural gas realizations.
Meanwhile, downstream, or refining and marketing earnings rose 73 percent from last year to $1.02 billion, reflecting stronger margins, particularly in refining. Chemical segment earnings increased 17 percent to $1.20 billion, also reflecting stronger margins.
The company's oil-equivalent production declined 4.7 percent from last year to 3,831 thousand of oil equivalent barrels per day or koebd. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 1 percent.
Liquids production declined to 2,065 thousands of barrels per day or kbd from the prior year's 2,199 kbd. The Abu Dhabi onshore concession expiry reduced volumes by 148 kbd.
Natural gas production for the quarter was 10,595 millions of cubic feet per day or mcfd, lower than last year's 10,914 mcfd, due to field decline and lower entitlement volumes.
Exxon Mobil's capital and exploration expenditures for the quarter decreased 7 percent from the year-ago quarter to $9.8 billion.
Rex Tillerson, chairman of Exxon Mobil said, "Upstream production for 2014 remains on track with previous full-year estimates of 4 million oil-equivalent barrels per day as the company adds new production from project startups."
Meanwhile, Chevron Corp. (CVX) reported a 13 percent increase in profit for the third quarter from last year, as strong earnings at its refining segment helped offset lower revenue and production. Both earnings per share and quarterly revenues topped analysts' expectations.
The San Ramon, California-based second largest U.S. oil company by market capitalization after Exxon Mobil, reported net income for the third quarter of $5.59 billion or $2.95 per share, up from $4.95 billion or $2.57 per share in the prior-year quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $2.55 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that foreign currency effects increased earnings for the quarter by $366 million, compared to a decrease of $276 million in the year-ago quarter.
Total revenues and other income for the quarter declined 7 percent to $54.68 billion from $58.50 billion in the same quarter last year, but topped analysts' consensus estimate of $52.97 billion.
Sales and other operating revenues decreased 8 percent to $51.82 billion from $56.60 billion in the prior-year quarter.
Worldwide net oil-equivalent production edged down to 2.57 million barrels per day or MB/D from 2.59 MB/D in the prior-year quarter.
Chevron's upstream earnings decreased 9 percent from the year-ago period to $4.65 billion, with U.S. earnings declining 9 percent to $929 million and International upstream earnings also decreasing 9 percent to $3.72 billion.
Chevron's downstream earnings more than tripled from the year-ago period to $1.39 billion, reflecting the benefits of lower feedstock costs and better refinery reliability, particularly in the U.S.
Of this, U.S. downstream earnings more than tripled to $809 million and international downstream operations earnings rose more than four-fold to $578 million.
Total worldwide capital and exploratory expenditures were $9.41 billion, down from $10.58 billion a year ago.
Chevron noted that new production was recently achieved at the Bibiyana Expansion Project in Bangladesh. The company added that Tubular Bells and Jack/St. Malo projects in the deepwater Gulf of Mexico are expected to start up during the fourth quarter and important construction milestones continue to be reached on its Gorgon and Wheatstone LNG projects in Australia.
John Watson, chairman and CEO of Chevron said, "In the downstream businesses, the completion of important reliability investments at several of our U.S. refineries is enabling us to benefit from the improved margin environment. We also continue to advance our growth investments."
XOM closed Thursday's trading at $94.45. In Friday's pre-market activity, the stock is up $0.72 or 0.76 percent to $95.17.
CVX closed Thursday's trading at $117.20. In Friday's pre-market trades, the stock is up $1.39 or 1.19 percent to $118.59.
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