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News > Companies  
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Exxon Mobil profit bursts
Oil company's earnings miss estimates, hurt by weak refining business and low crude prices.
April 23, 2002: 12:43 PM EDT

NEW YORK (CNN/Money) - Exxon Mobil Corp.'s shares tumbled in early trading Tuesday, falling more than 3 percent after reporting sharply lower first-quarter earnings that missed Wall Street expectations as a drop in refining and marketing margins squeezed the bottom line.

The world's largest non-government oil producer said earnings excluding merger effects and special items shrank to $2.15 billion, or 31 cents a share, from $5.05 billion, or 72 cents a share, a year earlier. Analysts polled by earnings tracker First Call expected a profit of 39 cents a share.

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The Irving, Texas-based firm, which was replaced last year by retailer Wal-Mart Stores Inc. (WMT: up $0.38 to $57.93, Research, Estimates) as the world's biggest company, said first-quarter revenue fell to $43.5 billion from $57.3 billion.

Shares of Exxon Mobil (XOM: down $0.78 to $41.07, Research, Estimates), a component of the Dow Jones industrial average, shed as much as $1.43 in early Tuesday trading, but gained back some of those losses by early afternoon.

"The only good news about the first quarter is that it's over," said Fadel Gheit, an analyst at Fahnestock & Co.

Gheit, who has had a "hold" on the stock since January, said Exxon Mobil's quarterly refining and marketing performance was one of its worst since the mid-1980s, hurt by one of the warmest winters on record and a rocky world economy following last September's terrorist attacks on the United States.

But Exxon Mobil is not alone in its woes. The entire industry has been struggling amid the recent world economic downturn, which caused oil and natural gas prices to sink amid waning demand.

Uncertainty in the Middle East, where U.S. forces continue fighting terrorism, and a more modest economic recovery than some had hoped for, are likely to continue to affect oil prices, Gheit said.

However, an uptick in demand as the summer driving season kicks in and consumers slowly return to air travel, along with an improving economy, should give oil companies a boost.

"This is a very very freaky market. The the bad news is this was a very bad quarter. The good news is next quarter is going to be better," Gheit said.

Net income fell to $2.09 billion, or 30 cents a share, from $5 billion, or 71 cents a share, a year earlier.

Exxon Mobil Chairman Lee Raymond said high inventory, weakened demand and rapidly rising raw material costs also contributed to the weak quarter. He said prices have improved since the first quarter, but cautioned that they are still low.

"Oil prices have remained above first-quarter levels and natural gas prices in North America have also improved," Raymond said in a statement. "Early in the quarter, we have seen some recovery in most refining and marketing margins, although they remain at low levels, particularly in the Asia-Pacific region."

The company said each of its businesses achieved cost-cutting goals in the quarter and sold its coal operations in Colombia. Capital and exploration spending increased 18 percent from a year earlier, as the company positioned itself for future production growth.

Exxon Mobil also said it logged higher corporate and financing expenses in the quarter, reflecting the impact of higher pension expenses.  Top of page






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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.