Exxon Hit By Weak Oil Prices

Exxon Corp. said Thursday earnings slid nearly 40 percent to $1.5 billion in the fourth quarter, as weak oil prices took their toll.

Exxon's (XON) profit per share during the quarter, at 63 cents against $1.01 in the year-ago period, including credits, were ahead of the consensus estimate of 57 cents a share. But the analysts' estimates had been lowered to reflect difficult circumstances for the company.

For the year, Exxon said profit dropped 25 percent to $6.4 billion. Revenue for 1998 totaled $117.5 billion, down from $137 billion in 1997.

The profit decline was directly linked to the lower price of oil, which fell 33 percent from 1997. "Average crude prices for the year were at their lowest level in over twenty years," said CEO Lee R. Raymond in a release. "Earnings were also adversely affected by lower natural gas prices, weaker chemical margins and depressed copper and coal prices."

Exxon's stock edged 1/8 lower Thursday morning to 70 7/8.

In December, Exxon announced plans to acquire Mobil Corp. for $86.9 billion in stock and debt, creating the world's largest energy company and fortifying the new entity against a steep decline in oil prices.

Written By Emily Church, CBS MarketWatch