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Exxon posts profit, but not a very strong one

Fourth quarter earnings of $2.8 billion lower by more than half from same period in 2014.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 2, 2016 at 9:50 AM
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IRVING, Texas, Feb. 2 (UPI) -- U.S. supermajor Exxon Mobil said it still managed to post earnings during the fourth quarter, though results were lower year-on-year by more than half.

Exxon reported fourth quarter earnings of $2.8 billion, down from the $6.6 billion in the fourth quarter of 2014. The company estimated full-year 2015 earnings of $16.2 billion, against $32.5 billion in 2014.

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The company said lower commodity prices, characterized by a long slump in crude oil, dragged on earnings in the downstream, or production, side of the industry.

Rex Tillerson, the company's chief executive officer, said the results reflect the challenges presented by the market downturn.

"The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value," he said in a statement.

Crude oil prices are lower in part because the market is oversupplied in response to weak global economic growth. Supply may move back toward a balance with demand by late 2016. Exxon said its own production increased during the fourth quarter by 4.8 percent year-on-year.

Exxon's report contrasts with its industry peers. Last week, Chevron, which has headquarters in California, reported a loss of $588 million for the fourth quarter, compared with year-on-year earnings of $3.5 billion. The loss was the first for Chevron in more than a decade and follows a 2015 move to cut about 2 percent from its global payroll.

British energy company BP posted a fourth quarter loss of $3.3 billion. For 2015, the company reported a loss of $6.5 billion, against a 2014 profit of $3.78 billion. BP tied much of the loss to charges stemming from the oil spill in the Gulf of Mexico in 2010, though like its peers, the company said it was feeling the pressure from the market downturn.

BP added it would eliminate about 7,000 members from its payroll by the end of next year, about 3,000 more than it said in January it expected to cut.

Exxon nevertheless joined its peers in reporting a reduction in spending, which at $31.1 billion marked a 19 percent decline from 2014. The company said it plans to spend about $23 billion this year, a decrease of 25 percent from 2015.

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