Exxon Mobil’s earnings missed analysts’ estimates for a second straight quarter as weakness in its chemicals and refining operations offset higher crude prices.
The giant oil producers’ profits have improved as oil prices have recently hit their highest levels since the end of 2014. For the first quarter, Exxon reported on Friday that net income rose to $4.7 billion, or $1.09 per share, from $4.01 billion, or 95 cents per share, a year ago.
But analysts had expected earnings of $1.12 per share, according to Thomson Reuters I/B/E/S.
On news of the earnings, Exxon shares fell 3.7% to $77.89. While oil prices have gained nearly 13% so far this year, and advanced 12% in 2017, Exxon stock is down 4.2% for 2018 and lost 7.3% in 2017.
“Increased commodity prices, coupled with a focus on operating efficiently and strengthening our portfolio, resulted in higher earnings and the highest quarterly cash flow from operations and asset sales since 2014,” CEO Darren Woods said in a news release.
In Exxon’s downstream business, which refines and sells fuels like gasoline, profits slumped nearly 16% from the same period last year, with the company attributing the decline to its international business, which saw higher expenses, lower profit margins and weaker gains from sales of assets.
The chemicals business also slumped, with profits falling about 14% from last year. “Both at home and abroad, Exxon’s profit margins fell while it spent more to grow its future production of chemicals,” CNBC noted.
The declines in downstream and chemicals offset a 50% gain in profits from Exxon’s business of exploring for and producing oil and natural gas. The American production business generated $429 million in profit, compared with a loss of $18 million a year ago, realizing gains from investments in U.S. shale oil production, particularly in the prolific Permian Basin.
“Through new discoveries and acquired acreage, we’ve positioned our upstream portfolio well for future growth,” Woods said. “We also made good progress on our plans to improve the production mix and grow premium product sales in the downstream and chemical businesses.”