Exxon quarterly profit declines 57 percent to lowest level since 2010

Posted Thursday, Aug. 01, 2013  comments  Print Reprints
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Exxon Mobil, which owns Fort Worth’s XTO Energy, 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 today, to $6.86 billion, down from $15.9 billion in the year-ago quarter. Last year’s result included a gain from the sale of a Japanese lubricants division and other assets. Excluding that, Exxon’s net income fell 19 percent.

On a per-share basis, Exxon earned $1.55. Analysts polled by FactSet were expecting $1.90 per share. Revenue fell 16 percent to $106.47 billion.

Irving-based 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.

The lower earnings reflect higher drilling costs at a time of flat or declining production, analysts say. Exxon says 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.

Exxon’s refining operations suffered in the second quarter because oil prices rose faster than wholesale gasoline prices. That narrows the profit refiners make because input costs were rising faster than prices refiners were getting for fuel.

These narrower margins reduced Exxon’s refining profit by $510 million in the quarter, the company said. The company also manufactured less fuel because refineries were undergoing maintenance. That reduced earnings by $370 million.

“Refining stuck out the most, but they missed across the board,” said Brian Youngberg, an analyst at Edward Jones.

In early trading, Exxon shares were down $1.46 to $92.29.

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