Exxon, Chevron earnings boosted by refining margins
By Anna Driver and Braden Reddall
HOUSTON/SAN FRANCISCO (Reuters) - Strength in refining and chemicals led to higher-than-expected fourth-quarter earnings for Exxon Mobil Corp (XOM.N: Quote) and Chevron Corp (CVX.N: Quote), the two largest U.S. oil companies.
A flood of oil produced from U.S. shale formations has pushed refining margins higher for many companies with plants in the United States, while chemical companies are benefiting from the low price of natural gas, a key feedstock.
Brian Youngberg, energy company analyst with Edward Jones in St. Louis, said bigger-than-expected refining earnings "were a common theme for this quarter" for Exxon and Chevron.
Exxon's overall profit was $9.95 billion, or $2.20 per share, compared with $9.4 billion, or $1.97 per share, in the same period a year earlier, while its refining arm's earnings quadrupled to $1.77 billion.
"As we look at just our U.S. Gulf coast refining circuit, we have more than tripled the processing of advantaged North American crude over the last couple of years," David Rosenthal, Exxon's investor relations executive, told analysts.
Chevron's net income grew to $7.2 billion, or $3.70 per share, from $5.1 billion, or $2.58 per share, a year earlier - though the latest profit included a $1.4 billion one-time gain.
Chevron's refining operations made a profit of $925 million, compared with a loss of $61 million a year before.
Increasing output from the wellhead, on the other hand, has been a struggle in the past year for big oil companies. Shares of ConocoPhillips COP.N fell on Thursday after its production outlook disappointed investors. Continued...