Exxon profit surges, but production slips
NEW YORK (AP) — Exxon Mobil Corp. net income rose 28 percent in the second quarter on a sale of Asian assets and higher oil prices, but oil and gas production slipped 6 percent, disappointing analysts.
On Thursday, Exxon reported net income of $8.78 billion in the second quarter on revenue of $111.65 billion. Last year during the same period, the company earned $6.86 billion on sales of $106.67 billion.
On a per-share basis, Exxon earned $2.05, up from $1.55 last year. The average estimate of analysts surveyed by Zacks Investment Research was for profit of $1.91 per share, but that estimate does not include the benefit from the Asian asset sale.
Exxon, based in Irving, Texas, does not adjust results based on one-time events such as asset sales, as most analysts and companies do. Exxon's sale of power and utility assets in Hong Kong helped increase earnings by $1.2 billion and masked weak production results.
Oil and gas production fell to 3.84 million barrels of oil and gas per day from 4.15 million barrels last year. The decline was driven by the expiration of rights to a field in Abu Dhabi and natural field declines.
Exxon's production has been steadily declining, and is a concern for investors. "Production volumes were weaker than anticipated," said Brian Youngberg, an analyst at Edward Jones. "Declining production continues to be a problem for the company."
Exxon shares were down $1.95 to $101.30 in morning trading. Exxon shares have climbed $2.05, or 2 percent, to $103.25 since the beginning of the year, while the Standard & Poor's 500 index has increased 6.6 percent. The stock has increased $9.50, or 10 percent, in the last 12 months.
Exxon benefited from higher oil prices in the quarter, both in the U.S. and abroad. In the U.S., Exxon sold oil for an average of $98.55 per barrel, up from $93.18 per barrel in last year's second quarter. Outside of the U.S., oil sold for $103.72, up from $101.54 last year.