Imperial Oil sees Q1 profit sink 57% to $289M

Imperial Oil reported a plunge in first-quarter profit Thursday to $289 million, down more than 57 per cent from $681 million for the same period a year ago.

Earnings amounted to 33 cents per share, compared with 75 cents per share for the same quarter last year.

Imperial said upstream earnings decreased primarily due to lower crude oil and natural gas prices, while the slow economy drove down chemical earnings.

Revenue for the quarter was $4.65 billion, down from $7.23 billion a year earlier.

"Sharply lower oil and natural gas prices as a result of the global economic downturn produced lower earnings for the quarter, compared to the same period last year. While downstream earnings were higher, the significant decline in commodity prices reduced our earnings overall," CEO Bruce March said in a release.

"Imperial is well-positioned to weather this economic downturn with its strong balance sheet, minimal debt, and long-term disciplined approach," he said. "Although earnings are lower, our plans are to continue our long-term strategy of investing through the business cycle and advancing our portfolio of company growth projects."

March told reporters after Imperial's annual meeting that the company expects to decide whether to move ahead with its Kearl oilsands development before the end of June.

"We should have something exciting to share with you in the next several weeks," he said.

The original cost estimate for the project, which would have an initial output of 100,000 barrels of oil per day, was pegged at $8 billion in 2004.

March said Imperial has been working to push down the project's costs for the last eight months by negotiating with contractors and suppliers.

In the past, Alberta's booming economy led to shortages and drove up costs for skilled workers and materials such as steel, cement and other fabrication products.

The slowdown in the province during the last nine months as oil prices fell has made such inputs for oilsands projects more affordable.

Shares of Imperial Oil closed down 35 cents to $42.65  on the TSX.