Exxon Mobil Corp., the world’s largest publicly traded oil company, said Thursday its net income grew 10 percent in the first quarter, as higher refining, marketing and chemical profit margins overcame lower crude oil and natural gas prices.
Net income rose to $9.3 billion, or $1.62 per share, for the January-March period from $8.4 billion, or $1.37 per share, a year ago. Analysts polled by Thomson Financial were looking for a profit of $1.52 per share.
Revenue fell to $87.2 billion from $88.9 billion a year earlier. Like other major oil companies, Exxon was hurt by lower oil and natural gas prices to start 2007 compared with a year ago.
Last year, the Irving, Texas-based company posted the largest annual profit by a U.S. company — $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion set in 2005.
Last month, Exxon Mobil said it will spend some of that money on more than 20 new global projects in the next three years, investments expected to add 1 million oil-equivalent barrels a day to the company’s volumes at peak production.
The company said its spending tab for capital and exploration projects in the first quarter was $4.3 billion.
“In the first quarter, Exxon Mobil continued to actively invest, bringing additional crude oil, finished products and natural gas to market,” Exxon Mobil Chairman and Chief Executive Rex Tillerson said in a statement.
Exxon Mobil was the third major oil company to report earnings in as many days. BP PLC, Europe’s second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profit rose 7.7 percent, but the result was propped up by assets sales as it also was hurt by lower commodity prices.
Exxon Mobil said earnings from its exploration and production arm — known as the upstream side of the business — were $6 billion, down from $5.7 billion a year ago, primarily reflecting lower oil and natural gas prices and decreased demand for natural gas in Europe.
The market price for crude oil was off more than $5 a barrel in the first quarter versus a year ago. The comparable price for natural gas also was down.
Exxon Mobil said oil production in the first three months of 2007 was slightly higher than a year ago, helped in part by increased production from projects in West Africa, Russia and the Middle East.
Natural gas production, however, was off from last year, hampered by mature field declines and lower European demand related to weather.
On the refining and marketing side of the business — known as the downstream — earnings rose to $1.9 billion from $1.3 billion to start 2006, lifted by improved refining and marketing margins and more efficient refining operations.
A company’s refining margin is the difference between what it costs to refine crude oil and what the company makes selling refined products, such as gasoline and jet fuel.
Exxon Mobil said it also saw improved profit margins at its chemicals business, where earnings of $1.2 billion were up from nearly $1 billion in the year-ago quarter.
During the first quarter, Exxon Mobil said it bought 108 million shares of its common stock at a cost of $8 billion. Shares outstanding were reduced from roughly 5.7 billion from at the end of 2006 to 5.6 billion at the end of March.