UPDATE 2-Exxon disappoints despite record profit
(Recasts, adds share price, investor quote, environmentalist quote)
NEW YORK, July 31 (Reuters) - Exxon Mobil Corp (XOM.N) broke its own record for the highest-ever quarterly profit by a U.S. company again on Thursday, but earnings still disappointed investors due to weaker-than-expected production.
Net income in the quarter rose to $11.68 billion, or $2.22 a share, on soaring oil prices. That compares with $10.26 billion, or $1.83 a share, last year.
Exxon -- the world's largest publicly traded company -- previously set the high-water mark for quarterly earnings in the fourth quarter of last year, when it brought in $11.66 billion.
Revenue in the quarter rose about 40 percent to $138.07 billion.
Still, shares dropped around 3 percent as Exxon's results lagged behind analyst expectations.
The company posted operating earnings of $2.27 a share in the quarter, which exclude a $290 million charge related to the recent Supreme Court ruling in the Exxon Valdez case. Analysts, on average, had expected the company to earn $2.53 a share, according to Reuters Estimates.
"Exxon was hurt this quarter by sharp declines in production in most regions. The comparison versus the second quarter last year for crude oil and liquids was down in every region around the globe," said Gene Pisasale, who helps manage about $13 billion at PNC Capital Advisors.
"They are spending $25 billion a year, and they are not even breaking even now in terms of production growth," he said.
The company's oil and gas production fell 8 percent from a year earlier, mostly due to the loss of assets taken over by Venezuela, a labor strike in Nigeria, and contracts that give host countries a larger share of production as oil prices rise.
Exxon both produces oil and refines it to make gasoline, and profit margins for gasoline were weak during the quarter, holding back earnings slightly.
U.S. oil prices averaged slightly less than $125 a barrel in the quarter, nearly double prices from a year earlier. Gasoline prices only rose 25 percent during that same period, resulting in weak profit margins for the fuel.
The company said earnings from its exploration and production business rose about 68 percent to $10.01 billion. But its refining and marketing earnings fell about 54 percent to $1.56 billion.
Profit from the company's chemicals business dropped 32 percent to $687 million.
Exxon's record profits have made the company a target for politicians and environmentalists. Continued...
