Exxon profit surges, just not enough

IRVING, Texas — Rising oil prices pushed second-quarter profit at Exxon Mobil Corp. up by 18 per cent, but the results Friday fell short of Wall Street expectations, and shares dropped in early trading.

Exxon earned $3.95 billion in the second quarter, or 92 cents per share.

Analysts were looking for $1.26 per share, according to a survey by Zacks Investment Research. Exxon does not adjust results based on one-time events such as asset sales, which totalled $307 million in the quarter.

Exxon is a global producer, and the price of benchmark international crude is up more than 50 per cent from a year ago.

With the higher prices, Exxon's revenue jumped 27 per cent to $73.50 billion, despite a 7 per cent decline in production of oil and natural gas. The company said production in the Permian Basin of Texas and Bakken field in North Dakota rose 30 per cent, but that couldn't offset declines in other areas.

Exxon is spending more to look for new sources of energy, however. It reported that capital spending — which was cut sharply during the price collapse that started in 2014 — jumped 69 per cent after a 36 per cent increase in the first three months of the year. Exploration work and drilling are notably rising in Brazil, the Permian Basin and Indonesia.

Natural gas output fell 10 per cent, however, partly because the company is focusing its U.S. shale operations on producing more oil and partly due to lower demand for gas in Europe.

Profit margins in Exxon's refinery business rose, with a higher number of facilities down for maintenance.

In trading before the opening bell, shares of Irving, Texas-based Exxon were down $3.62, or 4.3 per cent, to $80.61.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on XOM at https://www.zacks.com/ap/XOM

The Associated Press