Shares slipped 2.4% to $ 88.06 as results came in sharply below expectations. The company has now posted seven straight quarters of year-over-year profit declines and eight straight quarters of falling revenue, according to FactSet data.
Chief Executive Rex Tillerson said the results “reflect a volatile industry environment” and that the company “remains focused on business fundamentals, cost discipline and advancing selective new investments.”
For the June quarter, Exxon, the largest U.S. oil company, reported a profit of $ 1.7 billion, or 41 cents a share, down from $ 4.19 billion, or $ 1 a share, a year earlier. Analysts polled by Thomson Reuters were looking for 64 cents a share.
Revenue dropped 22% to $ 57.69 billion, below analysts’ forecast for $ 60.64 billion.
In the previous quarter, Exxon’s profit had plunged to the lowest level since 1999, a year when it nearly doubled in size by acquiring rival Mobil in an $ 80 billion deal. Investors shrugged off the decline, reflecting optimism stemming from a recent rally in crude prices. Friday’s results represent a new low since the merger.
Exxon also was hurt by declining profit in the downstream division, which had previously been a boon amid lower prices for oil and gas. In the latest quarter, refining and marketing, or downstream, earnings were $ 825 million down 45% from the year-earlier period. Exxon said weaker margins decreased earnings by $ 850 million while volume and mix effects increased earnings by $ 130 million.
Vast new supplies of gasoline around the world, combined with the overproduction of oil, has sent crude prices sliding. Refineries have been on a buying spree since crude-oil prices began their descent two years ago, giving them cheap feedstock to make gasoline, diesel and other fuels. But while demand for gasoline has been strong, particularly in the U.S., consumption hasn’t been enough to mop up all the fuel spilling out of refineries.
Profit in the exploration and production, or upstream, business plunged by 85% to $ 294 million. In the U.S., the upstream division widened its loss to $ 514 million from $ 47 million a year earlier.
During the quarter, Exxon slashed its capital and explorations spending 38% from a year ago $ 5.16 billion.
Oil companies around the world have been battered by a price crash that has left crude and natural gas stubbornly low. Producing countries such as Saudi Arabia and major international oil companies like Chevron Corp. have all continued to pump more fuel in the face of the crisis—a standoff that shows no signs of abating.
On Friday, Chevron, the No. 2 energy company in the U.S. by revenue, swung to a loss in the latest quarter—its third straight period in the red—as depressed prices continued to drag results, though the company’s revenue decline was less than anticipated.
Write to Anne Steele at [email protected]