(AP) — ExxonMobil Corp.'s refining and chemical operations rescued the company's third-quarter results amid falling global oil prices and lower oil and gas production. Exxon, the biggest U.S. oil company, posted a surprise increase in profit thanks to a 38 percent increase in profit from turning oil and gas into fuels and chemicals. "There's a reason Exxon is viewed as a safe haven in energy, and it's because it is diversified," said Brian Youngberg, an analyst at Edward Jones. "It can weather low oil prices."
The company said that it earned $8.07 billion on revenue of $107.49 billion in the third quarter. Last year during the same period, Exxon earned $7.87 billion on revenue of $112.37 billion. On a per share basis, the company earned $1.89, up from $1.79 last year and far above the $1.71 per share analysts polled by FactSet had predicted on average. Exxon's oil and gas production fell 4.7 percent compared with the same period a year ago, driven mostly by lower natural gas production and the expiration earlier this year of Exxon's rights to production at a field in Abu Dhabi.
Exxon's output has been slipping for years. Its production of the equivalent of 3.83 million barrels of oil per day in the quarter was the company's lowest since the third quarter of 2009. The company said Friday that it is on track to reverse this decline, however, and increase production to four million barrels per day by the end of the year as new projects come online.
Lower oil and gas prices cost Exxon $670 million in the quarter as global oil prices fell 18 percent between the beginning of July and the end of September. Oil continued to fall in October and is sure to weigh on the company's fourth-quarter production results. That quarter "will be a little more of a challenge," Youngberg said.
But low oil and gas prices make for low raw material costs — and higher profit — for refining and chemical operations, which turn oil and gas into fuels and chemicals. Exxon's profit from these operations rose to $2.22 billion from $1.62 billion in the quarter. Exxon shares were up 87 cents to $95.32 in morning trading. Exxon shares are down seven percent since the beginning of the year, compared with an eight percent increase in the Standard & Poor's 500 index.