Houston: Exxon Mobil Corp reported a steeper-than-expected drop in quarterly profit as natural gas and crude oil prices slid from a year ago and the global recession hurt demand for fuel.
Exxon shares fell 1.6% in early trading.
Exxon, which raked in record profits last year, has seen earnings wither as crude oil prices have fallen by more than half from a year ago. Refiners have also seen margins under pressure as weakness in industrial demand for fuels like diesel has caused a buildup in stockpiles.
“It looks disappointing,” said Phil Weiss, an analyst at Argus Research. “They missed on margins and production.”
Exxon, the world’s largest publicly traded oil company, said second-quarter net income was $3.95 billion, or 81 cents per share, down from $11.68 billion, or $2.22 per share, a year earlier.
Earnings excluding one-time items were $4.09 billion, or 84 cents per share. Analysts on average had expected $1.02 per share, according to Reuters Estimates.
Revenue fell 46% to $74.46 billion.
“Global economic conditions continue to impact the energy industry both in the volatility of commodity prices and reduced demand for products,” Rex Tillerson, Exxon’s chief executive, said in a statement.
Second-quarter production fell 3% from a year earlier, the Irving, Texas, company said. Analysts had been looking for production to be flat or slightly higher.
Earnings in the company’s exploration and production business fell 62% to $3.8 billion, while earnings in the refining unit fell 67% to $512 million.
In the first six months of the year, Exxon said it spent $12.3 billion, in line with its longer-term plan for capital spending of $125 billion over 5 years.
In the second quarter Exxon repurchased 75 million shares of its stock at a gross cost of $5.2 billion. In the third quarter it expects to buy back $4 billion of stock.
Shares of Exxon were down $1.16 to $70.27 in early trading on the New York Stock Exchange.