Exxon Mobil Q4 profit tumbled 58%

US oil giant Exxon Mobil reported a 58% drop in profit for the fourth quarter of last year.

The largest publicly traded oil company in the world announced that it will cut costs by a quarter this year, amid the collapse in oil prices.

Exxon Mobil recorded a net profit of $ 2.78 billion last quarter, compared to $ 6.57 billion a year earlier.

As a result of the 70% decline in oil prices of $ 100 a barrel in 2014 to around $ 30 now many energy companies cut their investments. 

The company posted fourth quarter earnings of 67 cents a share, compared with $1.32 a share in the year-earlier period.

Revenue for the quarter came in at $59.81 billion, against the year-earlier figure of $87.28 billion.

Analysts had expected the company to report earnings of about 63 cents a share on $51.36 billion in revenue, according to a consensus estimate from Thomson Reuters.

The oil giant also reported fourth quarter U.S. downstream revenue of $435 million, but an upstream loss of $538 million. Its oil and gas output rose 4.8 percent in the fourth quarter.

Exxon shares were down more than 3 percent in late morning trading.

Roger Read, oil analyst at Wells Fargo Securities, attributed the share decline to a lack of information on operating cost reductions and capital spending in Exxon's earnings announcement.

Exxon did say it expects to cut capital spending by $23.2 billion, or 25 percent, in 2016 and will suspend its share buyback program.

However, he called the current lower-for-longer oil price environment "a perfect situation" for Exxon, which he said has access to any type of capital it needs when the rest of the industry is struggling. With prices weak and other energy companies under pressure, the conditions are ideal for Exxon to pursue strategic buyouts, he added.

Wells Fargo Securities has rated outperform on shares of Exxon for the last year.

Last week, investment bank Tudor, Pickering, Holt & Co. downgraded Exxon to sell from hold, saying it sees "no reason for Exxon to continue to trade at a significant premium to its integrated peers with better risk-adjusted dividend yields available elsewhere."

Tudor questioned where Exxon's medium- and long-term growth would come from and said its projects for which a final investment decision has not yet been reached are challenged. Tudor said it believes Exxon has less room to cut costs because it expects Exxon's 2016 spending on exploration and production to be lower than its peers.

Exxon was overtaken by Fcebook as the fourth largest company in the S&P 500, after the social media giant hit $115 per share, an all-time high, on Monday morning. Facebook's market cap was $327.6billion versus Exxon's $317.6 billion at the close on Monday.