Business | Oil & Gas
Exxon falters on production drop
ExxonMobil fell 2.1 per cent to $91.10 in trading before US exchanges opened after the company said first-quarter net income rose to $10.9 billion, or $2.03 a share, from $9.28 billion, or $1.62, a year earlier.
- Bloomberg
- Published: 00:30 May 2, 2008
Chicago: ExxonMobil Corp. posted the smallest earnings increase among the world's three largest oil companies, falling short of analyst estimates as production dropped and refining profit margins narrowed.
ExxonMobil fell 2.1 per cent to $91.10 in trading before US exchanges opened after the company said first-quarter net income rose to $10.9 billion, or $2.03 a share, from $9.28 billion, or $1.62, a year earlier. Per-share profit was 10 cents lower than the average of 17 analyst estimates compiled by Bloomberg.
ExxonMobil's 17 per cent profit increase lagged behind the gains of 25 per cent and 63 per cent reported this week by Eur-ope's Royal Dutch Shell Plc and BP Plc. Oil and natural-gas production dropped 5.6 per cent, leaving Irving, Texas-based ExxonMobil unable to take full advantage of record crude prices.
Demand
Growth in worldwide demand for petroleum-based fuels to run trains, trucks, planes and cars accelerated to 2.2 per cent in the first quarter from 1.2 per cent in the preceding three months, according to the International Energy Agency.
Refiners and chemicals makers processed an all-time high of 3.67 million barrels of crude every hour during the first quarter, the Paris-based agency said in a March 11 report. ExxonMobil is the world's biggest refiner.
Crude prices are rising at the fastest pace since the first three months of 2000. Prices set a new all-time high at $119.93 last month.
Call for change
Meanwhile, members of the Rockefeller family are calling on ExxonMobil to make governance changes and increase spending on alternative fuels, sharpening the focus on the company's practices.
John D. Rockefeller founded the Standard Oil Co in 1870 and it became a precursor to ExxonMobil.
Fifteen descendants of the oil baron are involved in four shareholder resolutions seeking changes, including dividing the CEO and chairmanship positions held by Rex Tillerson.
Peter O'Neill, great-great-grandson of Rockefeller, said 66 of the 78 adult Rockefellers currently supported their stance.
The Rockefellers said the company was too focused on short-term windfalls. They said the company's reluctance to invest in alternative energy could result in lost profits down the road.
Exxon said it supports the Rockefellers' right to use the shareholder proposal process to make the family's views known to other stakeholders.
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