Exxon Mobil Corp. (XOM) said Thursday its third-quarter earnings surged
about 41% despite a drop in production as it continued to benefit from climbing
oil prices and a stronger refining margin.
Exxon Mobil reported a profit of $10.3 billion, or $2.13 a share, up from $7.35
billion, or $1.44 a share, a year earlier. The earnings, although in line with
analysts' average estimate, were a bit disappointing for some who had hoped the
oil company would post big beats like those from Royal Dutch Shell PLC (RDSA,
RDSA.LN), ConocoPhillips (COP) and Eni SpA (E, ENI.MI).
"I was hoping Exxon will surprise us too," says Fadel Gheit, an
analyst with Oppenheimer & Co.
Revenue increased 32% to $125.3 billion.
Major oil companies have reported a string of soaring quarterly earnings this
year thanks to a jump in oil prices and to the widening of the price difference
between
U.S.
and
European oil benchmarks. But Exxon Mobil's results, which included a 4% drop in
production despite high levels of spending, also show major oil companies
continue to struggle to maintain--let alone increase--output. Exxon's rival
Chevron Corp. (CVX) is expected to post a strong profit on Friday.
Exxon Mobil, the world's largest publicly traded oil company by market value,
reported a 53% jump in earnings for its exploration and production segment. The
Texas
oil
company's quarterly production declined to 4.3 million barrels of oil
equivalent mainly due to shortfalls in the
U.S.
,
Europe
and
Africa
.
The output decline was the first since the spring of 2009, marking the end to a
run helped by last year's $25 billion acquisition of XTO Energy. Excluding the
impacts of production-sharing contracts, effects from quotas established by the
Organization of Petroleum Exporting Countries and asset sales, Exxon production
would have been in line with last year, the company said.
The drop in production came despite the fact that Exxon Mobil is spending at
record levels. The company said its capital and exploration expenditures in the
first nine months of this year were a record $26.7 billion, up 21% from a year
earlier.
Exxon Mobil will need to "convince investors" that production will
rebound in the fourth quarter, said Credit Suisse analyst Edward Westlake.
Exxon Mobil's refining and marketing business rose 36% thanks to improved
refining margins, marking the highest since the end of 2008. The company's
chemical segment posted a profit of $1 billion, down 18% from the same quarter
a year earlier.
Exxon Mobil said it spent $5 billion in share repurchases in the third quarter
and that it expects to spend the same amount in the fourth quarter.
Shares
recently were trading 22 cents down at $80.85.