Exxon Discloses Earnings Dud Despite High Oil Prices
Carried by higher oil prices, ExxonMobils (NYSE:XOM) profits leaped 41% in the second quarter, but the worlds largest publicly traded energy company failed to live up to Wall Streets hopes.
Shares of Irving, Texas.-based Exxon slumped roughly 2% Thursday morning in response to the weaker-than-expected results.
Exxon said it earned $10.68 billion, or $2.18 a share, last quarter, compared with a profit of $7.56 billion, or $1.60 a share. Analysts had been calling for more robust EPS of $2.33.
Boosted by crude oil prices that have been hovering around $100 a barrel, Exxons revenue jumped 33.5% to $125.4 billion, surpassing the Streets view of $121.39 billion.
ExxonMobil recorded strong results during the second quarter of 2011, while investing at a record level of over $10 billion to develop new supplies of energy to meet growing world demand, CEO Rex Tillerson said in a statement.
Shareholders expressed their disappointment with the results as Exxons stock slipped 1.93% to $81.70 ahead of the opening bell. Those losses will eat into Exxons 2011 gain of nearly 14%.
Exxon, which at $410 billion is the largest U.S. company by market value, said its oil-equivalent production rose 10% last quarter. Excluding entitlement volumes, OPEC quota effects and divestments, production grew by 12%.
The company also said its capital and exploration expenditures surged 58% to a record $10.3 billion.
Exxon posted upstream earnings of $8.5 billion, up from $3.2 billion amid higher liquids and natural gas realizations. U.S. upstream earnings rose to $1.5 billion from $584 million.
Downstream earnings at Exxon soared to $1.4 billion from $136 million. The companys chemical arm posted a profit of $1.3 billion, down by $47 million from the year before amid unfavorable tax effects.