XOM Exxon Mobil Corp

By Anne Steele 

Exxon Mobil Corp. on Friday posted a 38% decline in quarterly profit as revenue slid more than expected amid the prolonged swoon in oil prices.

Shares lost 1.7% premarket to $85.65 as the oil giant reported its eighth straight quarter of year-over-year profit declines and its ninth straight quarter of falling revenue.

Chief Executive Rex Tillerson said the operating environment "remains challenging."

For the September quarter, Exxon, the largest U.S. oil company, reported earnings fell to $2.65 billion, or 63 cents a share, from $4.24 billion, or $1.01 a share, a year earlier. Analysts polled by Thomson Reuters were looking for 58 cents a share.

Revenue slipped 13% to $58.68 billion, below analysts' forecast for $63.85 billion.

Profit in the exploration and production, or upstream, business fell 16% to $620 million. Volumes declined 3% from a year ago, due to unplanned downtime, primarily in Nigeria, and new projects unable to fully offset declines at existing properties, the company said. In the U.S., the upstream division widened its loss to $477 million from $442 million a year earlier.

Exxon also was hurt by declining profit in the downstream division, which had previously been a boon amid lower prices for oil and gas. In the latest quarter, refining and marketing, or downstream, earnings were $1.2 billion, $804 million lower than in the year-earlier period. Exxon said weaker margins, mostly in refining, weighed on earnings by $1.6 billion while volume and mix effects lifted earnings by $170 million.

Chemical earnings, meanwhile, were comparable with last year's quarter, as higher maintenance costs, were offset by increased specialty product sales.

Exxon slashed its capital and explorations spending 45% from a year ago to $4.19 billion, bringing 2016's decline to 39%.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 28, 2016 08:47 ET (12:47 GMT)

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