Exxon Mobil Corp. earnings drastically dropped as the global oil prices collapsed. The recent decline is the company's worst quarterly performance in six years.
On Friday, Exxon Mobil Corp. said that their net income fell from $8.78 billion to $4.19 billion, which is $2.05 to $1 per share compared in 2014. According to Bloomberg Business, Exxon shares decreased 1.9 percent in trading to $81.40 in trading before regular U.S. equity markets opened.
Due to the oil prices drop worldwide, Exxon Mobil Corp. reduced share repurchases for the current quarter in half to $500 million compared to the April-to-June period, Market Watch noted. As per the company's statement, refinery profits plumped by lower costs for crude were more than offset by weaker results in the company's primary business including oil and natural gas production. The company's U.S. wells also revealed a $47 million loss.
"The buyback program is a big shocker," Societe Generale market strategist Robbert van Batenburg said during a phone interview. "The energy space has been traditionally one of the biggest sectors buying back stock."
In addition, Exxon Mobil Corp. also lessened their spending on major projects like floating crude platforms and gas-export terminals by 20 percent to $6.746 billion during the quarter while global crude prices fell 42 percent from the previous year to an average of $63.50 a barrel.
The decrease in Exxon Mobil Corp., which is the world's largest publicly traded oil company, was also due to the escalating global supplies and worries about slowing demand from China. CNBC reported that Wall Street had expected the company to deliver quarterly earnings per share of $1.11 on $72.48 billion in profits.
While oil prices have dropped by more than 50 percent in the past year, oil and gas output rose 3.6 percent to 4 million barrels oil equivalent per day. So far, Exxon Mobil Corp. shares have slipped about 10 percent on the year.
Earlier this year, Exxon Mobil Corp. announced it would reduce its 2015 capital expenditures by about $4.5 billion to $34 billion. The oil company giant has also been exploring opportunities to expand its Beaumont, Texas refinery. The expansion on its third crude distillation unit could make it the top refinery in the country.
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