Exxon Mobil Corp’s first-quarter earnings grew 1 percent, despite declining production and revenue, the world’s largest public company reported Thursday.
The Irving-based oil giant pulled in $9.5 billion in net income during the first three months of 2013, up from $9.45 billion in the same period a year ago because of strong gains in its chemical division.
But Exxon Mobil’s hydrocarbon production fell for a fifth straight quarter compared with the year earlier, dropping 3.5 percent. It’s capital and exploration expenditures were up 33 percent from a year ago, at $11.8 billion in the first quarter of 2013.
That spending included $3.1 billion for the acquisition of Celtic Exploration Ltd, the company said.
Exxon Mobil’s revenue fell 12 percent in the first quarter to $108.8 billion, down from $124 billion a year earlier.
Lower production led to a 10 percent drop in Exxon Mobil’s earnings from its exploration and production division and earnings for the company’s refining arm were down 2.5 percent.
Shares in Exxon Mobil fell about 1 percent following the earnings report, likely because the company projected lower spending to buy back outstanding shares, said Pavel Molchanov, an analyst for Raymond James.
Exxon Mobil has spent $5 billion to repurchase outstanding shares in the first quarter of 2013, but it is on pace to spend $4 billion for that purpose in the second quarter, the company reported. The oil giant’s shares were trading at about $88.48 around 12 p.m., down 95 cents.
“That’s not a big haircut in the grand scheme of things, but I can understand why it’s being somewhat negatively received,” Molchanov said. “To me this is just not a big deal.”
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Earnings from Exxon Mobil’s chemical branch surged 62 percent, however, jumping from $701 million in the first quarter a year ago to $1.1 billion in the same period of 2013. That was partly a result of low-cost feedstocks in the United States for Exxon Mobil’s chemical products, Exxon Mobil vice president of investor relations David Rosenthal said during a conference call with analysts.
Booming hydrocarbon production from shale has helped push ethane prices especially low and improved chemical margins.
Exxon Mobil’s higher chemical margins played a large role, even as the company’s chemical production declined 7 percent from the first quarter of 2012 because of asset sales in Japan.
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Rosenthal said Exxon Mobil is set to add on a major source of hydrocarbon this year, with the company’s Kearl oil sands project in Alberta set to start up soon. The project has been delayed because of unusually extensive cold weather that hampered perparations for its start up, he said.
“Literally, the actual production is imminent,” Rosenthal said.
That project is set to ramp up to 110,000 barrels per day by the end of this year, he said.