Exxon Q2 profit is lowest since early 2010

NEW YORK: Exxon Mobil 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 it earned $6.86 billion, down from $15.9 billion in the year-ago quarter, which included a gain from the sale of a Japanese lubricants division and other assets.
Excluding those year-ago gains, Exxon’s net income fell 19 percent.
On a per-share basis Exxon earned $1.55.
Analysts polled by FactSet expected Exxon to earn $1.90 per share.
Revenue fell 16 percent to $106.47 billion from $127.36 billion a year earlier.
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.
Exxon’s 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.