NEW YORK—Oil major Exxon Mobil Corp. announced Monday its profits and its production are 4 percent down in the 4th quarter, but earnings still beat expectations slightly, and investors rewarded Exxon with an almost one percent increase in stock value.
With a $371 billion market capitalization, Exxon and other large U.S. oil companies have an outsized influence on the stock market. The sheer size of these companies gives them more influence over the S&P 500 index.
Poor performance of a number of U.S. oil companies mainly due to lower global oil prices have already dragged the index down to 2.2 percent. If oil stocks did as well on average as other companies in the S&P, growth would have been on track for a 5.1 percent increase this year.
“Rising tides lifted all ships, and now the tide is coming down and all ships are falling,” said Fadel Gheit, an analyst at Oppenheimer & Co.
Stem the Bleeding
Exxon posted a 21 percent decline in both revenue and profit for the fourth quarter because of lower oil prices. The company said it earned $6.57 billion in the quarter, the lowest since the first quarter of 2010, on revenue of $87.28 billion.
It was the 13th decline in the last 14 quarters. Four years ago, Exxon was producing nearly 1 million more barrels of oil and gas per day than it is now.
Chevron Corp., which is in the midst of its own boom of new mega-projects, posted similar results Friday. It managed to eke out a small gain in production, but posted a 30 percent decline in profit.
While the price of a crude oil barrel has plummeted to less than $50, from over $100 in August of last year, large oil firms have been able to keep up profits due to higher refining profits because they paid less for the oil they bought on the open market.
