Exxon Mobil Corporation (XOM) Q4 Earnings Down 58 Percent; Shares Tank

Exxon Mobil

Exxon Mobil Corporation reported that its earnings declined 58% to $2.78 billion for the fourth quarter of 2015 from $6.57 billion the same period a year earlier. The energy company’s quarterly earnings per share were $0.67 per share compared with $1.56 a year ago.

Its capital expenditures dropped from $10.46 billion to $7.41 billion, down by 29% for the quarter. During the quarter, Exxon Mobil’s oil equivalent production increased 4.8% with liquids climbed 14% and natural gas down 5.6%.

For the full-year 2015, Exxon Mobil’s earnings dropped 50% to $12.2 billion from $32.5 billion a year ago. The company’s capital and exploration expenditures were $31.05 billion, down by 19% from $38.54 billion in 2014.

According to the company, a sharply lower commodity prices in the Upstream offset its higher earnings from Downstream and Chemical.

Exxon Mobil said its Upstream earnings fell $4.6 billion to $857 million; Downstream earnings increased $854 million to $1.4 billion while its Chemical earnings slid $264 million to $963 million during the quarter.

The stock price of Exxon Mobil tanked more than 2% to $74.15 per share at the time of this writing around $12:58 in the afternoon in New York. Over the past year, the energy company lost more than 16% of stock value. The company’s market capitalization is around $315.98 billion.

Exxon Mobil remained focus on business fundamentals

Exxon Mobil Chairman and CEO Rex W. Tillerson said the company’s financial results show a challenging environment, but emphasized that they remained focus on its business fundamentals including project execution and effective cost management.

“The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value,” said Tillerson.

During the quarter Exxon Mobil distributed $3.6 billion to shareholders including $500 million in stock buybacks. Its dividend rose 5.8% to $0.73 per share. For the full year 2015, the energy company repurchased 48 million shares of its common stock for the treasury worth $4 billion.

Exxon Mobil reduces drilling budget

Exxon Mobil decided to reduce its expenses on rig leases, floating oil platforms, gas terminals and other projects by 25% to $23.2 billion this year. The company’s drilling budget represents a 10-year low.

Tillerson started cost-cutting since the mid of 2015 before the collapse of crude oil prices since the completion of the company’s most expensive mega-projects.  The WTI crude is trading around $30.29 per barrel and the Brent crude is trading around $33.21 per barrel today.

Commenting on the company’s results, Sam Margolin, an analyst at Cowen and Company LLC, told Bloomberg, “They are actually executing pretty well. It’s typical Exxon.”