Exxon Mobil posts lowest first-quarter profit since 1999

Irving-based Exxon Mobil reported its lowest first-quarter profit since March of 1999 as tumbling prices for oil and natural gas continued to drag down the energy giant.

Net income fell to $1.81 billion, or 43 cents a share, from $4.94 billion, or $1.17, a year earlier, Exxon said Friday. Still, the per-share result beat analyst estimates.

The company was boosted by a 38 percent increase in its petrochemicals division, to $1.4 billion, as well as a 33 percent cut in capital expenditures as it pulled back on drilling and exploration. The world’s biggest non-state oil explorer joined energy giants BP, Statoil and Total in beating analyst expectations on the back of massive cost cuts and strong refining and chemical results even as oil profits vanished.

“I look at this and say, ‘Is this an oil company?’” said Pavel Molchanov, an analyst with Raymond James Financial. “All of its earnings came from refining and chemicals. It did not make any money, for the first time in modern history, on exploration and production.”

Standard & Poor’s on Tuesday stripped Exxon of the AAA credit rating the company had held since the Great Depression, citing a swelling debt level. The company was cut to AA+, the same as the U.S. government.

The chemicals division benefited from stronger margins and higher sales volumes, as the price of raw materials — oil and gas — plunged compared with last year’s first quarter. The downstream segment earned $906 million as global gasoline demand remained strong, according to the statement.

The 2016 capital budget has been cut by about 33 percent from last year, a bigger decline than earlier estimated. Despite those measures, full-year profit is expected to dip below $10 billion in 2016 for the first time since the company’s historic acquisition of Mobil Corp. in 1999.

This story was originally published April 29, 2016 at 1:18 PM with the headline "Exxon Mobil posts lowest first-quarter profit since 1999."