Low oil prices hit ExxonMobil, Chevron earnings

Low crude prices and weak refining margins weighed on third-quarter profits at US oil giants ExxonMobil and Chevron in reports Friday, but earnings rose compared with the prior two quarters. The results were the latest sign of pain for the industry in the wake of a two-year slump in oil prices, with ExxonMobil notching a 37.5 percent decline in profits to $2.7 billion and Chevron disclosing a 36.8 percent fall to $1.3 billion. At the same time, the third-quarter marked progress over the first half of 2016, especially at Chevron, which had reported losses in the two previous reporting periods. "Third quarter results, though down from a year ago, reflect an improvement from the first two quarters of this year," said Chevron chief executive John Watson. "We have made progress toward our goals of lowering the cash break-even in our upstream business and getting cash balanced." Revenues at Exxon fell 12.9 percent to $58.7 billion and 12.2 percent at Chevron to $30.1 billion. Net earnings fell sharply in both Exxon's upstream division, which explores for and produces crude oil and natural gas, and its downstream division, which processes crude into gasoline and other petroleum products. The company also notched a modest decline in chemical earnings. Nevertheless Exxon's overall earnings were also an improvement over the first two quarters of 2016. At Chevron, both upstream and downstream businesses showed steep declines. Chevron does not have a separate chemicals business. Petroleum company profits have been under pressure since crude oil prices began retreating in 2014. Prices have stabilized in recent months, but the benefits have yet to fully materialize in industry earnings. Both companies have sharply cut capital spending in response to the weak environment. Exxon's results translated into 63 cents per share, five cents above analyst expectations. Chevron reported 68 cents per share, much above the 37 cents forecast by analysts. The company boosted its quarterly dividend by a penny to $1.08 per share. ExxonMobil shares fell 1.6 percent to $85.55 in pre-market trade, while Chevron rose 0.6 percent to $100.50