Exxon Mobil Profit Surges but Gas, Oil Output Drops
{{#rendered}} {{/rendered}}Exxon Mobil Corp. (XOM), the world's largest publicly traded oil company, posted a 32 percent rise in quarterly profit on Thursday, pushed up by a relentless surge in crude oil prices and strong refining margins.
But a more than 4 percent drop in oil and gas production in the second quarter tempered much of the enthusiasm, adding to Wall Street concerns that large oil companies are finding it increasingly difficult to boost output.
Nevertheless, like its peers, Exxon has continued to bask in the glow of an extended bullish run in oil and gas prices, spurred by soaring demand in Asia and increasingly stretched global supplies of crude. Oil prices topped $62 a barrel earlier this month to touch yet another record high.
{{#rendered}} {{/rendered}}Persistently strong refining and marketing margins also helped boost the company's bottom line.
"Oil and gas production volumes (and earnings) were disappointing in the quarter, but this was offset by a now-familiar bonanza in the refining and marketing division - particularly in the U.S.," Credit Suisse First Boston analysts said in a research note.
Net income was $7.64 billion, or $1.20 a share, in the second quarter, compared with $5.79 billion, or 88 cents a share, in the year-earlier quarter.
{{#rendered}} {{/rendered}}Excluding a $200 million charge for a lawsuit provision, the company earned $1.23 per share. Analysts, on average, expected Exxon to earn $1.22 per share, according to Reuters Estimates.
The Irving, Texas company, which has maintained a large stock buyback program (search) as its cash pile soars alongside oil prices, said it would further increase its share repurchase level to $5 billion in the third quarter.
"Fans of huge share buybacks will cheer today's announcement, those looking for progress on production growth will be less happy," CSFB wrote.
{{#rendered}} {{/rendered}}Exxon shares eased 5 cents, or less than 1 percent, at $59.55 on the New York Stock Exchange (search) on Wednesday.
The company's total revenue jumped to $88.57 billion from $70.69 billion in the year-earlier quarter.
Oil and gas production fell 4.3 percent, as maturing oilfields and maintenance activities offset higher crude production in West Africa and higher gas volumes in Qatar. Excluding divestments and entitlement effects, production fell by 2 percent.
{{#rendered}} {{/rendered}}Boosted by investment at its exploration and production operations, capital spending in the quarter grew to $4.54 billion from $3.62 billion a year earlier.