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Exxon earns $6.86 billion in 2nd quarter

NEW YORK — Exxon Mobil reported its lowest quarterly profit in more than three years, as the oil and gas giant again struggled to boost production and results from its refining operations weakened.

Net income fell 57 percent in the second quarter. Exxon said Thursday that it earned $6.86 billion, down from $15.9 billion in the year-ago quarter, which included a gain from the sale of a Japanese lubricants division and other assets. Even without those year-ago gains, Exxon's net income fell 19 percent.

On a per-share basis Exxon earned $1.55. Analysts polled by FactSet expected Exxon to earn $1.90 per share.

Exxon shares fell $1.03 to close at $92.72, on a day when 24 of the 30 stocks in the Dow Jones industrial average moved higher.

Exxon's revenue fell 16 percent in the second quarter to $106.47 billion from $127.36 billion a year earlier.

Exxon pointed a finger at the global economy, saying growth in the U.S. remained sluggish, the Chinese economy grew slower than expected and Europe remained weak. This helped lower the average price of Brent crude, a benchmark used to price international oil used by many U.S. refineries, by $10 per barrel compared with last year, Exxon said.

Exxon last posted earnings of less than $7 billion the first quarter of 2010, when oil prices averaged $79 per barrel. In this year's second quarter, prices averaged $94 per barrel.

Exxon's lower earnings reflect higher drilling costs at a time of flat or declining production, analysts said. Exxon said oil and gas production fell 1.9 percent in the quarter, making it the ninth straight quarter production has declined compared with the year earlier.

Michael Kay, an analyst at S&P Capital IQ, said in a note to investors that Exxon's disappointing oil production in the quarter is casting doubts on the company's ability to hit its production goals for the 2014 through 2017 period.

Exxon's refining operations suffered in the second quarter because oil prices rose faster than wholesale gasoline prices. That narrowed the profit Exxon's refineries made because input costs rose faster than the prices received for the refined fuel.

Exxon earns $6.86 billion in 2nd quarter 08/01/13 [Last modified: Thursday, August 1, 2013 10:49pm]
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