Exxon’s profit tumbles 58 percent, slashes capex by one-quarter

Exxon Mobil Corp on Tuesday reported its smallest quarterly profit in more than a decade and said it will cut 2016 spending by one-quarter and suspend share repurchases as it copes with a prolonged downturn in crude prices.

THE NUMBERS: The UK’s biggest energy company reported that fourth-quarter earnings fell to $196 million from $2.2 billion on lower prices and another huge set-aside to cover costs related to the 2010 drilling rig disaster in the Gulf of Mexico. The company estimated full-year 2015 earnings of $16.2 billion, against $32.5 billion in 2014.

Revenue for the quarter totaled $59.81 billion, a drop of over 31 percent from the company’s year-ago revenue of $87.28 billion.

Despite the low oil price Exxon said in a statement its oil and gas output production increased 4.8 per cent in the fourth quarter.

Exxon hasn’t logged a quarterly profit below $US3 billion since 2002.

WHAT’S NEXT: Chevron has already sold off $11 billion in pipelines and other assets in the past two years and hopes to unload up to $10 billion more through 2017.

Tillerson started cost-cutting since the mid of 2015 before the collapse of crude oil prices since the completion of the company’s most expensive mega-projects. As per the latest trading data available, the net money flow stood at $110.86 million as the shares received $293.68 million in upticks and gave away $182.82 million in downticks. Morgan Stanley set a $80.00 price target on Exxon Mobil and gave the company a “sell” rating in a research report on Monday, November 2nd. The dismal results reflected oil’s 41 percent plunge in the past 12 months.

“Obviously it’s all about oil again, leading the market lower”, said Peter Cardillo, chief market economist at First Standard Financial. The shares has underperformed the S&P 500 by 0.08% during the past week but Exxon Mobil Corporation (NYSE:XOM) has outperformed the index in 4 weeks by 5.21%.

Last year’s fall in gas and oil prices was great for consumers, saving the average USA driver $540 last year. US gas averaged $2.235 per million British thermal units during the period, down from $3.829 a year earlier.

West Texas Intermediate crude, the benchmark for US produced oil, fell 5 percent to $30.05 a barrel, igniting Tuesday’s selloff.

Bucking the day’s trend, Alphabet was up 1.3 percent at $780.91.

The company got $35 for every barrel of oil and other liquids, compared with $66 a year before. A company spokesman said the decline was largely due to reduced earnings and favorable resolution of past tax issues that were booked in the fourth quarter.

In the downstream division, profits totaled $1.4 billion, up by $854 million year over year.