Exxon Mobil posts lowest annual profit since '02

NEW YORK — Exxon Mobil's earnings fell by more than half to $19.3 billion in 2009, the lowest total in seven years, as company refineries struggled with a plunge in global fuel consumption. But Exxon remains the profit champion among U.S. public companies.

The world's largest publicly traded oil company finished the year with a 23 percent drop in fourth-quarter profit. Exxon now has posted lower profits for five straight quarters after setting a record of $14.83 billion in the third quarter of 2008.

Like rivals ConocoPhillips and Chevron, Exxon's business of exploring for and producing oil benefited from an increase in crude prices at the end of 2009. But weak demand for gasoline, heating oil and other products severely depressed profits at the companies' refineries.

Exxon's results have swung with the price of oil and the impact of the global recession. When oil spiked above $147 a barrel in mid-2008, Exxon set ever-higher marks for earnings.

Then oil prices plummeted, and Exxon suffered a yearlong hangover that included its smallest quarterly earnings in several years.

The Irving, Texas, company earned $6.05 billion, or $1.27 a share, for the final three months of 2009. That compares with $7.82 billion, or $1.54 a share, a year earlier. Revenue rose 6 percent to $89.8 billion.

The fourth-quarter results still beat analysts' expectations and shares rose $1.75, or 2.7 percent, to $66.18.

For the full year, Exxon earned $3.98 a share. That compares with a record-breaking year in 2008, when Exxon recorded the highest profit ever for a U.S. company — $45.2 billion, or $8.66 a share.

Still, Exxon will remain the highest-earning company in the Standard & Poor's 500 index, a rank it has held since 2000 after it bought Mobil.

By comparison, Wal-Mart is expected to earn $14 billion for the fiscal year ended Jan. 31, while Microsoft earned $14.6 billion in the fiscal year ended last June.

Exxon's U.S. refineries lost $287 million in the fourth quarter as the price of gasoline was outpaced by the rise in the price the company paid for crude oil. Profits from the international refining and marketing business dropped 96 percent.

Chevron said last week its fourth-quarter profit fell as it lost $613 million in its refining business. ConocoPhillips posted a $1.2 billion fourth-quarter profit, but its refineries lost $215 million.

Valero Energy, America's largest independent refiner, lost almost $2 billion in 2009.

But while those companies plan to wind down parts of their downstream business to cut losses, Exxon said it doesn't plan to follow.

"We don't see a need right now for any significant restructurings at this time," said David Rosenthal, Exxon's vice president of investor relations. "But we'll see how things go."

Exxon has sold some of its interests in various refineries and pipelines during the past several years, Rosenthal added.

Despite the drop in annual revenue, Exxon boosted spending by 4 percent in 2009 to $27.1 billion.

Exxon is expanding its natural-gas operations. In December, it plans to buy XTO Energy in a deal worth about $29 billion at the time.

XTO is a major holder of natural-gas assets in the U.S., which would make Exxon a major player in what is expected to be a robust market for the cleaner-burning fuel.