Exxon, Chevron numbers falling shy of forecasts

Exxon and Chevron are earning billions and benefiting from the new tax law, but profits are falling short of expectations that were based on rising inflated oil prices.

Chevron shares fell 5.6 percent Friday; Exxon’s were off 5.1 percent.

Both U.S. oil giants were expected to get a boost from crude prices, which rose sharply in the fourth quarter. But Exxon’s production fell by 3 percent from a year earlier, to about 4 million barrels of oil day.

“This company just cannot get production growth going,” said Brian Youngberg, an analyst with Edward Jones. “They talk about all these (new) projects, but they’re always in the future. People want to start seeing some results.”

Net income soared to $8.38 billion in the fourth quarter, compared with $1.68 billion a year earlier. But $5.94 billion of the increase came from a one-time tax gain, as the new law with a lower corporate rate reduced tax liabilities.

Stripping away the tax gain and the write-down of operations in Canada and the Gulf of Mexico because of Exxon’s long-term forecast of natural gas prices, adjusted profit was 88 cents per share. Analysts surveyed by FactSet expected $1.03 per share.

Exxon Mobil Corp. lost money on U.S. oil and gas production after excluding the tax gain. That’s an area where Exxon expects to grow this year from 26 drilling rigs to 36 in the Permian Basin of Texas and New Mexico and the Bakken field in North Dakota.

With higher crude prices, Exxon’s revenue rose 18 percent to $66.52 billion, but that was still well below FactSet’s projected $71.94 billion.