Exxon Mobil, Chevron top estimates

Exxon Mobil Corp. said Friday that fourth-quarter earnings rose 6 percent to $9.95 billion with help from higher refining profit margins, while rival oil major Chevron Corp. posted a 41 percent gain in net income for the fourth quarter.

Exxon Mobil still makes most of its money by producing oil and gas, but that end of the business was less profitable than a year ago because of lower prices and production. Exxon made up the difference in the refining business.

The world's biggest oil company said Friday that net income equaled $2.20 per share, compared with $9.4 billion, or $1.97 per share, a year earlier.

Revenue fell 5 percent to $115.17 billion, a drop of $6.44 billion.

Analysts surveyed by FactSet expected profit of $1.99 per share on revenue of $115.22 billion.

Profit from exploration and production of oil and gas fell 12 percent but still totaled $7.76 billion, more than three-fourths of Exxon Mobil's income for the quarter. Production fell 5 percent, oil prices dipped, and the company took in less money from asset sales.

Exxon Mobil produces most of its oil outside the United States. Profit from overseas production tumbled by nearly one-fifth, but Exxon partly offset that by boosting its profit from U.S. production by more than one-third.

Outside of exploration and production, most of Exxon's other profit comes from refining and selling petroleum products such as gasoline, diesel and jet fuel. That business did very well in the fourth quarter, earning $1.8 billion, an increase of more than $1.3 billion from a year earlier, mainly due to higher refining margins.

Other oil refiners have also reported better margins this earnings season as they switched from foreign crude to cheaper U.S. oil.

Chevron Corp.  produced more oil and gas than the previous quarter, improved the performance of its refinery business and realized a gain from swapping assets in an Australian natural gas field. It posted net income of $7.2 billion for the quarter on revenue of $60.6 billion. That's up from $5.1 billion on revenue of $60 billion a year ago.

On a per-share basis, Chevron earned $3.70. Analysts had expected the company to earn $3.06 per share, according to FactSet, but analysts had not factored in the $1.4 billion gain from Chevron's asset exchange.

Stacey Hudson, an analyst at Raymond James, estimates the exchange was worth 72 cents per share, which would put Chevron's adjusted earnings 8 cents below what analysts had expected but 40 cents higher than the fourth quarter of last year. Chevron's results were also helped by the sale of the company's fuels marketing operations in the Caribbean.

Excluding the gain from the Australian asset sale Chevron's net income rose 14 percent in the quarter.

Chevron's production rose to 2.67 million barrels of oil and gas per day for the quarter, up just slightly from a year ago but up substantially from the 2.5 million the company produced in the third quarter of last year. For the year, Chevron produced an average of 2.64 million barrels per day, down from 2.67 million barrels per day in 2011.

Production has been hurt by the temporary closure of the company's Brazilian offshore project in what is known as the Frade field. It has been closed since oil was found to be seeping from the field in November 2011 and again in March 2012.

Chevron's chemicals and refining operations improved because input costs at the plants including crude oil, natural gas and natural gas liquids fell while the prices for the refined fuels and chemicals rose. Chevron's refinery output in the U.S. fell by 75,000 barrels per day, however, after an August fire at its Richmond, Calif. plant shut down a processing unit.

Exxon Mobil (XOM) shares fell 16 cents to $89.81 in early trading Friday, while shares of Chevron (CVX) gained 84 cents to $115.99.