ExxonMobil Corp. took a half a billion hit to its 4Q2008 earnings because of damage repairs and lower oil and natural gas volumes associated with hurricanes Gustav and Ike. However, the company, whose quarterly profit fell more than at any time in six years, still reported the largest annual profit in U.S. history Friday, with 2008 earnings of $45.22 billion.
The Irving, TX-based super major's earnings in the final three months of 2008 were down 33% from the same period of 2007 as commodity prices slumped. The producer reported earnings of $7.82 billion ($1.55/share), which was $3.84 billion lower than earnings in 4Q2007. Capital and exploration expenses jumped 11% in the period from a year earlier to $6.8 billion.
ExxonMobil's 4Q2008 profit was smacked by $570 million in losses related to last September's two Gulf of Mexico (GOM) hurricanes, Gustav and Ike, a hit also reported by Chevron Corp. (see related story). However, it was the global economy and lower oil and gas prices that impacted ExxonMobil's quarterly profit the most.
Still even with higher costs and lower commodity prices, ExxonMobil exceeded Wall Street's forecast, which on average had pegged earnings of $1.45/share.
"Weaker crude oil prices, higher operating expenses, lower chemical volumes and the impact of the Gulf Coast hurricanes were partly offset by higher downstream margins," CEO Rex Tillerson said.
ExxonMobil's oil-equivalent production decreased 3% from 4Q2007. Excluding the impacts of lower entitlement volumes, OPEC quota effects and divestments, production was down about 1%. Cash flow from operations and asset sales was about $12.2 billion, including asset sales of $1.8 billion.
In the last three months of 2008, ExxonMobil's worldwide natural gas production totaled 9,849 MMcf/d, down 565 MMcf/d from the same period of 2007. New production volumes from project additions in the North Sea, Qatar and Malaysia were more than offset by field decline and lower European demand, the company said.
Earnings from U.S. upstream operations totaled $699 million, which was $576 million lower than in 4Q2007.
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