Exxon Mobil posted its smallest quarterly profit in more than 17 years as low oil and gas prices pushed the company to write down the value of some natural gas holdings in the United States.
The 40 percent decline in fourth-quarter profit capped Exxon's weakest year since 1998.
Still, Exxon ended a string of nine straight quarters in which revenue declined from a year earlier.
The company's new CEO, Darren Woods, didn't signal any change in Exxon strategy. He blamed the lower profit on the long slump in oil and gas prices and the $2 billion write-down, and said Exxon's string of major projects around the world put it in good position for the long term.
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The write-down mostly covered gas properties in the Rocky Mountains that Exxon acquired in 2010 when, under then-CEO Rex Tillerson, it paid $31 billion for XTO Energy. The deal made Exxon the largest natural gas producer in the U.S. but has not paid off as expected because new drilling techniques boosted gas production and prevented prices from rising.
Exxon had been slower than other oil companies in writing down the value of oil and gas reserves as commodity prices fell. Securities regulators have been investigating Exxon's write-down practices, according to The Wall Street Journal.
Fourth-quarter net income was $1.68 billion, or 41 cents per share. That included a $2 billion impairment charge, making it Exxon's smallest quarterly gain since it earned $1.53 billion in the third quarter of 1999.
Analysts expected 72 cents per share, according to a survey by Zacks Investment Research, but they lacked all the information they needed to make accurate forecasts.
Analysts usually exclude one-time events such as asset sales or write-downs from their forecasts. Exxon had signaled in October that it was reviewing the value of its assets because of lower prices but never told analysts how big the write-down would be until Tuesday, an Exxon spokesman said.
Without the fourth-quarter impairment charge, Exxon would have earned 89 cents per share, the spokesman said.
Exxon reported revenue of $61.02 billion, an increase of 2 percent but less than the $63.57 billion forecast in the Zacks survey.
Brian Youngberg, an analyst for Edward Jones, called it "a good but average quarter." International operations -- both the exploration and production business and refining -- were relatively strong, and chemicals continued to be a plus for the company, he said.
But the company continues to struggle to maintain production, which fell 3 percent compared with the fourth quarter of 2015. This month Exxon said it will pay $5.6 billion in stock for acquisitions that will double its presence in the Permian Basin, a shale formation beneath Texas and New Mexico that is the hottest oil and gas field in the U.S.
"They are trying to do something on the shale side, but it's so small compared to the size of the company," Youngberg said. "It's hard for them to move the needle."
Like other big oil companies, Exxon has responded to the slump in crude prices that began in 2014 by slashing capital and exploration spending. Exxon's spending dropped 35 percent in the fourth quarter compared with a year earlier.
Exxon earned $7.84 billion for all of 2016. That was the company's smallest full-year profit since 1998, when it earned $6.44 billion.
Shares of Exxon Mobil Corp., based in Irving, Texas, fell 97 to $83.89 on Tuesday. The shares have slipped 7.6 percent so far in 2017, while the Standard & Poor's 500 index is up about 2 percent.
This story has been corrected to show that the fourth-quarter profit was Exxon's smallest in more than 17 years, not 18 years.