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Tuesday, 23 April, 2002, 16:00 GMT 17:00 UK
Bad news cocktail hits Exxon profits
Lee Raymond, chairman, Exxon Mobil
Lee Raymond: Hoping for higher oil prices
A cocktail of misfortunes ranging from warm weather to the Argentine crisis have hit profits at oil giant Exxon Mobil.

Exxon Mobil, the world's largest quoted oil firm, has reported underlying profits of $2.15bn for the January to March period, less than half those reported for the first three months of 2001.

The firm blamed the slide largely on lower oil prices - compared with a year before - a 70% slump in North American gas prices and the toughest refinery and product sales markets "since the mid-1980s".

"Severely compressed refining and marketing margins were experienced worldwide and were the primary driver in the decline," chairman Lee Raymond said.

The firm said it had also been hit by warm weather, which reduced demand for heating oil, and lower sales of jet fuel as the aviation industry struggled to recover from the aftermath of 11 September.

And earnings were "adversely affected" by foreign exchange losses in Argentina, where the peso has plummeted against the dollar, Tuesday's results statement said.

Wall Street reaction

The statement was poorly received at Wall Street, where analysts had been expecting profits of about $2.7bn.

Exxon shares dropped $1.38 to $40.47 in early trade in New York on Tuesday, dragging down stock in European oil firms in sympathy.

In London, Shell shares closed 11.5p lower at 500.5p on Tuesday, with BP stock ending down 9.5p at 588p.

Revival hopes

The fall in underlying profits, which excluded revenues attributed to mergers, represented the third successive quarter of decline in Exxon profits from a record $9.43bn reached for the first half of 2001.

But Mr Raymond reported that resurgent oil and gas markets were beginning to revive earnings growth, with the nascent economic recovery developing demand for refinery products.

"Oil prices have remained above first-quarter levels and natural gas prices in North America have also improved," Mr Raymond said.

"Early in the quarter, we have seen some recovery in most refining and marketing margins, although they remain at low levels, particularly in the Asia-Pacific region," he said.

See also:

19 Feb 02 | Business
Exxon in talks on Saudi deals
23 Oct 01 | Business
Exxon's profits tumble
08 Apr 02 | Business
Opec warns of oil crisis
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