HOUSTON — It pays to be integrated, Exxon Mobil Corp. executives told investors, as the largest publicly traded oil and gas company beat projected earnings on the strength of its downstream sector.
Exxon said its third-quarter earnings rose 3 percent to $8.07 billion, from $7.87 billion in the same period a year prior. The Irving, Texas-based company reported an earnings per share of $1.89, up from $1.79 in Q3 2013. The tally came in ahead of the $1.70 analysts had projected for the quarter, according to a Bloomberg survey.
The brightest spot for the quarter was the refining sector, which Exxon said contributed to $820 million in earnings as margins rose. The company squeezed more profit from each barrel it produced despite falling oil prices and the gain more than offset a 4.7 percent decrease in third-quarter oil-equivalent production.
In a written statement, Exxon CEO Rex Tillerson said that the earnings growth was “driven by higher margins and improved operations in the downstream and chemical businesses,” and had been “partially offset by the impact of lower upstream realizations.”
Downstream earnings boosted the company’s bottom line by $1.02 billion, up $432 million from last year. The downstream sector was boosted by more volume but held back by foreign currency exchanges and a slight decline in petroleum products sales.
On the upstream side, Exxon saw its U.S. liquid production hold mostly steady at 442,000 barrels per day in Q3 2014 and 423,000 in Q3 2013. U.S. upstream earnings were $207 million higher in 2014 than they were in 2013.
Total liquids production was 2.1 million barrels per day, down from 2.2 million in last year’s third quarter. The expiration of the company’s onshore concession in Abu Dhabi reduced volumes by 148,000 barrels per day, Exxon said. Excluding that, liquids production rose slightly. Third quarter natural gas production was 10 billion cubic feet per day, down 319 million cubic feet per day from 2013.
Exxon executives didn’t appear concerned about falling crude prices. On a call with investors, Jeff Woodbury, Exxon’s vice president of investor relations, said that the company had planned to pull back on capital expenditures for the next few years anyway as its projects matured.
Woodbury said that capital expenditures peaked at $42.5 billion annually in 2013 and will likely fall to less than $37 billion in 2015 through 2017. Exxon’s capital expenditures were $9.8 billion in the quarter, up slightly from the previous quarter but down from $9.9 billion in the same period last year.
The company still expects to grow to about 4.3 million barrels of oil equivalent production per day, he added, as it laid out initially in March.
Exxon’s was trading at $95.98, up 1.62 percent by mid-Friday, as the whole market fared well.
“They’re staying the course,” said Stewart Glickman, an analyst at S&P Capital IQ. ”They have enough financial flexibility to wait out the choppy waters.”
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