Exxon Mobil’s quarterly profit down 21 percent

February 2, 2015, 2:14 PM UTC
Key Speakers At 21st World Petroleum Congress
A logo sits illuminated outside the Exxon Mobil Corp. corporate pavilion during the 21st World Petroleum Congress in Moscow, Russia, on Monday, June 16, 2014. Work between Texas-based Exxon, the world's largest oil company by market value, and state-run Rosneft on Sakhalin Island in Russias Far East provides a template for further exploration, especially in the Arctic's Kara Sea, Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said at the World Petroleum Congress in Moscow today. Photographer: Andrey Rudakov/Bloomberg via Getty Images
Photograph by Andrey Rudakov — Bloomberg/Getty Images

Exxon Mobil Corp said on Monday its quarterly profit fell 21% as weak oil prices took a toll, but results topped Wall Street expectations due to tax benefits and a favorable arbitration ruling.

Global oil markets are oversupplied at a time when demand is waning, a situation that has caused crude prices to tumble by more than half since June. During the quarter, the average price for benchmark Brent fell 30% from a year earlier.

Exxon (XOM) also said it will reduce its share buyback program in the first quarter by more than half to $1 billion. In the fourth quarter, Exxon spent $3 billion on share repurchases.

Profit in the fourth quarter fell to $6.57 billion, or $1.56 per share, from $8.35 billion, or $1.91 per share in the same quarter a year earlier.

Analysts, on average, expected a profit of $1.34 per share, according to Thomson Reuters I/B/E/S.

Earnings were helped by about $1 billion in items that included deferrals on income tax and a favorable arbitration ruling for expropriated assets in Venezuela, Exxon said.

“I think the quality of the earnings beat is questionable,” said Brian Youngberg, an oil analyst at Edward Jones in St. Louis. “Some net-tax effects and Venezuela really drove the beat. They remain growth challenged.”

Oil and natural gas production fell 3.8%, according to Irving, Texas-based Exxon.