Exxon Mobil, Chevron dogged by refining, chemicals troubles
By Jennifer Hiller HOUSTON (Reuters) - Exxon Mobil Corp and Chevron Corp on Friday reported lower profits, citing lower margins and refining weaknesses, areas that have plagued the two oil companies off and on for more than a year. Exxon posted the first loss in its refining business since 2009, citing the worst refining margins on gasoline and other profits it had seen in a decade. Chevron reported its refining and chemical profits fell 65 percent.
By Jennifer Hiller
HOUSTON (Reuters) - Exxon Mobil Corp and Chevron Corp on Friday reported lower profits, citing lower margins and refining weaknesses, areas that have plagued the two oil companies off and on for more than a year.
Exxon posted the first loss in its refining business since 2009, citing the worst refining margins on gasoline and other profits it had seen in a decade. Chevron reported its refining and chemical profits fell 65 percent.
Both reported top-line figures that missed Wall Street expectations and were lower than year-ago levels due to weaker crude pricing.
Exxon's 49 percent drop in first-quarter profit showed the turnaround at the largest U.S. oil producer remains a work in progress.
"It was a tough market environment for us this quarter," Exxon Senior Vice President Jack Williams said on a call with analysts.
Exxon continued to spend heavily to boost output, with capital spending up 42 percent over a year ago as it poured new investment into its shale and offshore operations. Investors have been pressing oil companies to cut back on spending and increase returns to shareholders.
Its first-quarter profit fell to $2.35 billion, or 55 cents a share, from $4.65 billion, or $1.09 a share, a year ago. Analysts had expected Exxon to earn 70 cents per share, according to Refinitiv Eikon estimates.
"Clearly, the corner is further away than we expected and we expect this to lead to underperformance in the near term," analysts at RBC Capital Markets said in a client note.
At Chevron, investors ignored earnings that beat estimates and focussed on its $33 billion bid for rival Anadarko Petroleum Corp.
Occidental Petroleum Corp on Wednesday sought to derail Chevron's offer with a unsolicited, $38 billion bid for Anadarko.
Chevron Chief Executive Michael Wirth told analysts on Friday joint integration planning to combine the two companies had begun. He declined to say if it would raise its offer for Anadarko, saying it had a signed agreement with Anadarko.
"We would not be surprised to see Chevron raise its offer," wrote analysts at Edward Jones in a research note, saying they believed the company's bid will "ultimately be the successful one."
Chevron's production rose and achieved higher profit from its U.S. shale business, offsetting some of the drop in international oil and gas earnings. But sharp declines in overall refining and chemicals knocked first-quarter net to $2.65 billion, or $1.39 per share, from $3.64 billion, or $1.90 per share, a year earlier. Wall Street had expected $1.30 per share.
Chevron's daily production of oil and gas rose to 3.04 billion of barrels, from 2.85 billions of barrels in the year-ago period, boosted by a 55 percent increase in its Permian output.
The Anadarko takeover battle prompted analysts to ask Exxon about new acquisitions in the Permian Basin of West Texas and New Mexico, the top U.S. shale field.
"I would be surprised if over time we did not pick up some more Permian acreage," Williams said. He added that Exxon "doesn't need to."
Growing output in the Permian Basin was a bright spot at Exxon, rising to 226,000 barrels of oil equivalent per day. It remains on track to produce 1 million barrels by 2024, and would use half of its existing inventory by then, he said.
Exxon's oil and gas production rose 2 percent overall to 4 million barrels per day (bpd), up from 3.9 million bpd in the same period the year prior.
Shares of Irving, Texas-based Exxon dipped 2.1 percent to close at $80.49 Friday. Shares of San Ramona, California-based Chevron slipped less than 1 percent to close at $117.10.
(Reporting by Jennifer Hiller in Houston; Editing by Jonathan Oatis and Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.