Exxon Mobil Gets Margin Boost

Exxon Mobil(XOM Quote - Cramer on XOM - Stock Picks) said its profit in the first quarter jumped 10% from the same period a year ago as strength in its refinery business overcame setbacks on the oil and gas production side.

For the quarter, the world's biggest oil company made $9.28 billion, or $1.62 a share, up from $8.4 billion, or $1.37 a share, a year earlier. It generated $87.22 billion in revenue, down from $88.98 billion a year ago.

The earnings handily beat analysts' average estimate of $1.52, according to Thomson Financial.

Exxon's downstream refining and marketing businesses earned $1.91 billion in profits, an increase of $641 million compared with the first quarter of 2006. The improvement was due to increased product sales and higher refining margins, the company said in a press release Thursday.

Refinery utilization rates in the U.S. have been abnormally low this spring, increasing the margins, or "crack spreads," between crude oil and derivative products such as motor gasoline. Exxon clearly reaped the benefits of the higher refining margins during its first fiscal quarter.

Exxon's success in its downstream businesses made up for weaknesses on the upstream exploration and production side. The company earned $6.04 billion globally through the exploration, production and selling of oil and natural gas, but that was $342 million less than Exxon made during the same period last year.

The upstream setback was partly caused by record warm temperatures in Europe, which put downward pressure on natural gas demand there, according to Henry Hubble, vice president of investor relations, who spoke on a conference call.

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