By Jennifer Hiller
HOUSTON (Reuters) – Exxon Mobile Corp and Chevron Corp on Friday reported lower profits, referring to lower margins and refinement of weaknesses, areas that have sometimes plagued the two oil companies for more than a year.
Both reported the top line figures that missed the Wall Street expectations and were lower than last year due to weaker crude pricing.
Exxon's 49 percent fall in the first quarter The result showed that the turning point of the largest US oil producer is still a work in progress.
"It was a tough market environment for us in the quarter," said Exxon's senior president Jack Williams on a conversation with analysts.
Exxon continued to spend heavily on increasing production, with capital expenditures of 42 percent over a year ago, as it reclaimed slate and offshore investment. Investors have pushed oil companies to reduce spending and increase shareholder returns.
Earnings for the first quarter fell to $ 2.35 billion, or 55 cents shares, from $ 4.65 billion, or $ 1.09 a year ago. Analysts had expected Exxon to earn 70 cents per share, according to Refinitive Eikon estimates.
"Clearly, the corner is farther away than we expected, and we expect this to lead to short-term underperformance," analysts at RBC Capital Markets
In Chevron, investors ignored earnings that beat estimates and focused on the offer of 33 billion dollars for competitor Anadarko Petroleum Corp.
On Wednesday, Occidental Petroleum Corp attempted to track Chevron's offerings with an undesirable $ 38 billion bid for Anadarko.
Chevron's CEO Michael Wirth told analysts on Friday joint integration planning to combine the two companies had begun. He refused to say if it would increase Anadarko's offer and said it had a signed agreement with Anadarko.
"We wouldn't be surprised to see Chevron increase the offer," wrote Edward Jones analysts in a survey note, saying: They believed the company's bid would "ultimately be the success."
Chevron's production rose and gained higher profits from its US shale business, offsetting some of the decline in international oil and gas revenues. However, the sharp decline in total refining and chemicals knocked the first quarter net to $ 2.65 billion, or $ 1.39 per share, from $ 3.64 billion, or $ 1.90 per share, a year earlier. Wall Street had expected $ 1.30 per share.
Chevron's daily oil and gas production increased to 3.04 billion barrels, from 2.85 billion barrels a year ago, increasing by a 55 per cent increase in Permian production.  The Anadarko takeover bid prompted analysts to ask Exxon for new acquisitions in the Permian Basin in West Texas and New Mexico, the top US scale.
"I would be surprised if we did not over time take up any more Permian land," says Williams. He added that Exxon "does not need."
Growing production in the Permian Basin was a bright spot on Exxon and increased to 226,000 barrels of oil equivalent per day, which is still on track to produce 1 million barrels by 2024 and will spend half of the existing stock then, he said.
Exxon's oil and gas production increased 2 percent in total to 4 million barrels per day (bpd), up from 3.9 million bpd in the same period the year before
Shares in Irving, Texas-based Exxon, dipped 2.1 percent to close at $ 80.49 on Friday. , California-based Chevron, fell less than 1 percent to close at $ 117.10.
(Reporting Jennifer Hiller in Houston; Editing Jonathan Oatis and Tom Brown)