Exxon profit up, tops Street on taxes and output

HOUSTON (Reuters) - Exxon Mobil Corp reported a better-than-expected 53 percent increase in quarterly profit, helped by a lower tax rate and a surge in natural gas production in the United States and Qatar.

Exxon, the world's largest publicly traded oil company, also saw its results lifted by higher profits in its chemicals and refining units. A recovering global economy has sparked a bigger appetite for chemicals and fuels including diesel and gasoline.

Oil demand rose last year and the U.S. government expects

another 1.5 percent gain this year.

Exxon's exploration and production results were also lifted by higher oil prices, which climbed 12 percent from a year earlier to average around $85 per barrel in the fourth quarter.

Still, the company's bottom line was also helped by lower taxes, an analyst said.

"A lot of the beat looks like it was on a lower effective tax rate," Phil Weiss, oil analyst at Argus Research said on Monday. "Production was really strong, but the beat really was on gas, which is not as profitable as liquids.

Weiss had expected a tax rate of 46 percent, but said the company's actual fourth-quarter rate was about 38 percent.

Exxon's purchase of U.S. gas producer XTO Energy Inc in June has been a drag on the company's shares. But the rally in oil prices has helped the stock in recent months. Shares of Exxon are trading around the highest level in about two years.

(For a graphic on Exxon share price vs. crude oil, click

http://r.reuters.com/nun77r)

Exxon, based in Irving, Texas, reported a fourth-quarter profit of $9.25 billion, or $1.85 per share, compared with $6.05 billion, or $1.27 per share in the same quarter a year earlier.

Analysts on average had expected a profit of $1.63 per share, according to Thomson Reuters I/B/E/S.

Oil-equivalent production rose 19 percent from the year-ago quarter, lifted by liquefied natural gas operations in Qatar, the company said.

"Exxon has such big exposure to refining and chemicals that they really benefit when the economy gets better," Allen Good, oil analyst at Morningstar, said. "And their production was huge, driven by volumes from Qatar and the XTO acquisition."

Earnings in Exxon's exploration and production unit climbed 29 percent from the year-earlier quarter to $7.48 billion while chemical earnings soared 49 percent to $1.07 billion. Refining profit rose sharply to $1.15 billion from $189 million a year ago.

Revenue soared to $105.2 billion from $89.8 billion a year earlier.

For the year, Exxon said its capital expenditures were a record $32.2 billion and the company spent $5 billion to buy back its shares in the fourth quarter.

Shares of Exxon rose about 1 percent, or 69 cents, to $79.68 in morning trading on the New York Stock Exchange. Shares have risen 17 percent so far this year. That compares with a 16 percent increase in the CBOE index of oil companies.

(Reporting by Anna Driver in Houston, editing by Dave Zimmerman)

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