Despite a plunge in oil prices, both Exxon Mobil and Chevron turned in better-than-expected results, lifting their stocks. Bobbi Rebell reports.
Falling oil prices may be taking down profits, but both Exxon Mobil and Chevron still beat earnings expectations. Exxon's results largely credited to their diversified business which produces a strong cash flow. Chevron has been slashing costs, planning to cut its budget 25 percent next year and then again the year after. It's also reducing its workforce by ten percent. Societe Generale John Herrlin doesn't see oil prices rebounding any time soon. SOUNDBITE: JOHN HERRLIN, ENERGY ANALYST, SOCIETE GENERALE (ENGLISH) SAYING: "The market has to thoroughly absorb Iran coming back on if you remove all the sanctions, and Saudi Arabia is still producing flat out. so we need to see supply growth really drop in the U.S." But investors still cheered the news, sending shares of both Exxon and Chevron higher in Friday's trading. Investors have a lot to like says O'Shares Chairman Kevin O'Leary: SOUNDBITE: KEVIN O'LEARY, CHAIRMAN, O'SHARES INVESTMENTS (ENGLISH) SAYING: "What's happened as a result of oil price collapsing is the refining business is finally very profitable again so these large multinationals or very large energy companies participate in that upside. They also have very strong balance sheets and, the thing I love about them, the very most fantastic cash flow. The chances that either of these names will ever cut their dividend in my view, zero." Crude prices have fallen more than fifty percent from last year's high above $100 a barrel.