HOUSTON (Reuters) –
Exxon Mobil Corp (XOM.N), the world's largest publicly traded company, posted a 58 percent drop in quarterly profit, missing Wall Street estimates, as the global recession sliced into demand for crude oil and depressed prices.
Exxon and other energy companies have seen oil and gas prices fall sharply from peaks last summer as consumption wanes and supplies swell.
Crude oil in the first quarter averaged just over $43 per barrel, down 56 percent from the same quarter a year before, while the average price of natural gas in the United States slid 44 percent.
Still Exxon, unlike other peers that have cut budgets or delayed big projects, is still spending more on oil and gas development.
Exxon spent $5.8 billion on exploration and development in the first quarter, up 5 percent from a year earlier.
"In spite of the dramatic changes to the global economic environment, Exxon Mobil is maintaining its long-term focus and disciplined approach to capital investment," Rex Tillerson, Exxon's chairman and chief executive officer, said in a statement on Thursday.
Fred Burke, president of Johnston Lemon Asset Management in Washington, D.C., sees Exxon shares as a stake in the eventual turnaround in the world's leading economies.
"They're going to need energy, and Exxon is the best," he said. "There's people who are going to be buying the stock." Burke predicted Exxon could reach $85 a share within six months.
Net profit in the first-quarter was $4.55 billion, or 92 cents per share, compared with $10.89 billion, or $2.02 per share in the same quarter a year earlier.
Analysts on average had Exxon to report a profit of 95 cents per share, according to Reuters Estimates.
Oil and gas production in the quarter rose slightly from a year ago to 4.2 million barrels of oil equivalent per day, in line with analysts' projections.
Upstream earnings slid 60 percent to $3.5 billion, while profit at the company's refining and marketing fell 3 percent to $1.13 billion.
Exxon purchased 107 million shares of its stock in the first quarter, for a gross cost of $7.9 billion.
Shares of Exxon edged up a few cents in premarket trading from Wednesday's New York Stock Exchange close of $68.44.
(Additional reporting by Braden Reddall in San Francisco, editing by Dave Zimmerman)