Exxon Mobil's earnings were cut by more than half to $US19.3 billion ($NZ27.11 billion) in 2009, the lowest total in seven years, as company refineries struggled with a plunge in fuel consumption around the world.
But the world's largest publicly traded oil company remains the profit champ among US public companies. Wal-Mart is expected to earn $US14 billion for the year ended January 31, and Microsoft earned $US14.6 billion in the fiscal year ended in June 2009.
Exxon's results have swung with the price of oil and the impact of the global recession. When oil spiked above $US147 a barrel in mid-2008, Exxon set ever-higher marks for earnings by a US company. Then oil prices plummeted, and Exxon suffered a yearlong hangover that included its smallest quarterly earnings in several years.
The Irving, Texas company finished 2009 with a 23% decline in fourth-quarter income. Exxon earned $US6.05 billion, or $US1.27 a share, for the final three months of the year. That compares with $7.82 billion, or $1.54 a share, a year earlier.
Revenue increased 6% to $US89.8 billion. Exxon now has posted lower profits for five straight quarters after setting a record of $US14.83 billion in the third quarter of 2008.
The fourth-quarter results still beat analysts expectations of $US1.19 a share and shares rose $US1.30, or 2%, to $US65.73 in morning trading. For the full year, Exxon earned $US3.98 a share. That compares with a record-breaking year in 2008, when Exxon recorded the highest profit ever for a US company with earnings of $US45.2 billion, or $US8.66 a share.
Exxon has been the highest-earning company in the S&P 500 index since 2000, following its acquisition of Mobil Corp. The company said its US refineries lost $US287 million in the fourth quarter as oil prices rebounded and outpaced increases at the pump. Profits from the international downstream business dropped 96%.
As the recession crimped demand, Exxon responded by cutting back on production of gasoline, diesel and other fuels in 2009. Other oil companies also struggled as their refineries failed to pass along higher oil costs to consumers.
Chevron Corp. said last week its fourth-quarter profit fell 37% after losing $US613 million in its refining business. ConocoPhillips posted a $US1.2 billion fourth-quarter profit, but its refineries lost $US215 million. Valero Energy Corp., America's largest independent petroleum refiner, lost almost $US2 billion in 2009.
Despite the drop in annual revenue, Exxon didn't reduce capital spending and exploration. It boosted spending by 4% in 2009 to $US27.1 billion. In December, Exxon announced plans to buy XTO Energy in an all-stock deal that was worth about $29 billion at the time. XTO is a major holder of natural gas assets in the US, and the deal would make Exxon a major player in what is expected to be a robust market for the cleaner-burning fuel.
The deal, which is subject to approval by the government and XTO shareholders, would be Exxon's largest since its $US75 billion purchase of Mobil Corp. in 1999.
