Low oil prices slammed quarterly profit at the world's largest publicly traded oil company. Exxon plans to end buybacks and cut spending. Fred Katayama reports.
Low oil prices slammed earnings at ExxonMobil. Quarterly profit at the world's largest publicly traded oil company plunged 58 percent. Earnings fell sharply in its exploration and production business. Overall revenue also dropped. Still, it fared better than rival Chevron, which lost money in the quarter. That's partly because ExxonMobil has a big business in refining and processing as well as chemicals. The drop in commodities prices bolstered that downstream business, more than doubling its profit. It also made money in chemicals, but less than last year. Amid the crude oil crisis, Exxon anticipates it'll cut capital spending by a fourth this year. And it says it won't do buybacks to reduce its outstanding shares. Raymond James analyst Pavel Molchanov said, "Ending share buybacks and cutting capex by 25 percent are painful steps for a company that prides itself on being very steady on buybacks and spending. These moves show the pressure of the times." ExxonMobil shares fell in early trading. Its stock is down 2 percent this year but has outperformed its rivals as well as the S&P 500.