HOUSTON (Reuters) - Exxon Mobil Corp (XOM.N) on Friday reported a 5.2% drop in fourth-quarter profit on weaknesses in chemicals and refining and flat oil and gas output, with asset sales helping to stem the decline.
Oil companies last quarter suffered from weaker prices for their products, and in Exxon’s case it has been spending heavily to boost its oil output to reverse production declines.
Shares were down 3% to $62.86 in early trading. The stock has dropped about 29% since Chief Executive Darren Woods took over three years ago.
Exxon’s full-year profits of $14.3 billion fell short of the potential $25 billion that Woods forecast last March at the company’s investor day.
“There’s no doubt that 2019 was a challenging year for a number of our businesses,” Woods said on a Friday morning call with analysts, noting that prices and margins are near or at 10-year lows for natural gas, refining and chemicals.
Exxon is betting that a growing global middle class will drive demand for its products despite what Woods called the “short-term impact” of excess supply. “We believe strongly that investing in the trough of this cycle has some real advantages,” he said.
Its production in the Permian Basin, the largest U.S. shale field, was up 54% from a year ago to around 294,000 barrels of oil and gas daily. But quarterly profits on U.S. production were down 74% as the company spent heavily to boost output and suffered from lower natural gas prices.
Overall, the exploration and production business, its largest, benefited the most from the sale of
