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ExxonMobil and Chevron reported sharp deteriorations in first-quarter earnings, hit by lower oil and gas prices and a squeeze on refining margins, but their results reflected differing degrees of strain.

Exxon earnings were down 63 per cent but exceeded analysts’ expectations, while Chevron reported a loss that was larger than expected. 

The two largest US oil groups made losses on oil and gas production in the US, but for Exxon that was offset by profits in the rest of the world, whereas Chevron made a loss on international operations. 

Both companies also suffered falling profits from downstream refining and marketing operations as margins fell from last year’s high levels, but for Exxon that was offset by a strong rise in profits from its chemicals operations. Chevron reported lower profits from its 50 per cent stake in CP Chem, its joint venture with Phillips 66. 

Exxon’s net income after tax was $1.81bn compared with $4.94bn in the equivalent period of 2015. The first quarter of this year marked the recent trough in oil prices, with internationally traded Brent crude dropping to about $27 a barrel. It has since rebounded to more than $48. 

Rex Tillerson, chief executive, said Exxon “continues to respond effectively to challenging industry conditions”, improving its performance and raising margins in some areas in spite of low prices. 

On Tuesday Standard & Poor’s, the rating agency, stripped Exxon of the triple A grade that it and its predecessor companies had held since 1930, citing “large dividend payments” as one of the reasons. 

The following day the company announced a further 3 per cent increase in its quarterly dividend. 

Jeffrey Woodbury, Exxon’s vice-president for investor relations, said on a call with analysts that “nothing has changed” with respect to the company’s “prudent management of the balance sheet.” He added: “Our ability to access financial markets on attractive terms remains strong.”

He said Exxon was open “very alert” to possible acquisitions, but added: “We’ve got to be patient … We need to make sure it is value accretive to the business.”

Chevron reported a $725m after-tax loss for the first quarter, almost double the average of analysts’ forecasts. It said the strength of the US dollar against the currencies of countries where it operates, including the Canadian dollar and the Venezuelan bolivar, had cut earnings by $319m. 

Oil and gas production lost $1.46bn in the quarter, outweighing the $735m profit from refining. 

The company has stepped up its planned job cuts for 2015-16 to 8,000 — 1,000 more than it had said previously.

John Watson, chief executive, said the company’s efforts were focused on “improving free cash flow”.

“We are controlling our spend and getting key projects under construction online, which will boost revenues,” he added. 

During the quarter, Chevron announced the first shipment from its $54bn Gorgon liquefied natural gas project in Australia. The first cargo from the new Angola LNG plant is expected in May. 

Mr Watson repeated his plan to shift Chevron’s focus away from huge investment such as Gorgon towards “high-return, shorter-cycle projects”, such as drilling in the Permian Basin shale region of west Texas, where the company is ramping up production. 

Joe Geagea, executive vice-president for technology and projects, told analysts on a call that Chevron had cut its costs in the Permian by 40 per cent, and now had about 4,000 sites for possible wells that would give a respectable 10 per cent return with US crude at $50 per barrel.