Third-quarter earnings fell well below year-earlier levels at some of the world's biggest oil companies, further evidence their businesses face a long road to financial recovery with crude trading around $50 a barrel.
While many energy companies sounded a note of optimism that the worst of the two-year oil price crash is over, quarterly profits disclosed this week by Exxon Mobil Corp. Chevron Corp., Statoil ASA and others generally were lower than a year ago. For the last 12 month stretch, earnings were among the lowest for the industry in more than 15 years.
Exxon, the world's largest publicly-traded oil producer, reported a 38% decline in quarterly profit, its eighth straight quarter of year-over-year declines, as revenue slid more than analysts expected on a prolonged swoon in oil prices. Its third-quarter earnings fell to $2.65 billion, or 63 cents a share, from $4.24 billion, or $1.01 a share, a year earlier.
Results were hurt by weaker profit in its downstream or refining division, which had previously been a boon amid lower prices for oil and gas. In the latest quarter, downstream earnings were $1.2 billion, $804 million lower than in the year-earlier period.
Exxon slashed its capital and exploration spending 45% from a year ago to $4.19 billion, bringing 2016's decline to 39%.
Rex Tillerson, Exxon's chief executive, said that the "operating environment remains challenging," although he and other oil executives recently have pointed to signs of improvement.
Chevron said its quarterly profit fell 35% from a year earlier to $1.3 billion. Chief Executive John Watson said the results, though down from a year ago, were improved from the first two quarters of the year.
The company has cut capital spending and operating and administrative expenses by more than $10 billion from the first nine months of 2015 "as a result of a series of deliberate actions we have taken," he said.
French oil giant� Total� SA was a positive outlier among the major oil companies. It said Friday that its third-quarter net profit nearly doubled from the same period a year earlier, thanks to deep cost cuts and rising output. Its net profit rose 81% to $1.95 billion over the period, while overall revenue contracted 8% to $37.41 billion.
"Cost cuts have been accelerated and we will work more on it," said Total finance chief Patrick de La Chevardi� re.
Many larger oil companies are close to generating enough cash to pay for dividends and new investment. That's an inflection point that has been closely watched by investors as a barometer for a market turnaround.
Further spending reductions have emerged as a peculiar form of bragging rights, with one company after another rallying after revealing the success of cost-cutting efforts. ConocoPhillips shares were up 4%� on Friday on top of a 5% gain Thursday after disclosing plans to cut spending by an additional $300 million.
Oil giants are looking ahead to 2017 for signs of a modest recovery. The Organization of Petroleum Exporting Countries is weighing an agreement that could continue to prop up prices.
Several major discoveries have added to positive sentiment, including a recent Exxon find in Nigeria that could hold up to a billion barrels.
"The worst is over for the sector," said Brian Youngberg, an energy analyst with brokerage Edward D. Jones & Co. in St. Louis. "It doesn't mean oil is going to go way up, but conditions are gradually improving as markets rebalance and the companies reduce spending."
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