Exxon Mobil 2nd Quarter Profits Sets US Record

HOUSTON - Exxon Mobil Corp. reported second-quarter earnings of $11.68
billion Thursday, the biggest profit from operations ever by any U.S.
corporation, but the results were well short of Wall Street
expectations and its shares fell.

The world's largest publicly traded oil company said net income for the
April-June period came to $2.22 a share, up from $10.26 billion, or
$1.83 a share, a year ago.

Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter.

Excluding an after-tax charge of $290 million related to an Exxon
Valdez court settlement, earnings amounted to $11.97 billion, or $2.27
per share.

Analysts on average expected Exxon Mobil to earn $2.52 a share on
revenue of $144 billion, according to a survey by Thomson Financial.
The estimates typically exclude one-time items.

The record-setting results were largely expected, given that crude
prices in the second quarter were nearly double what they were a year
ago. Natural gas prices were significantly higher too.

But investors expected even bigger profits Thursday, especially after
Europe's Royal Dutch Shell reported a 33 percent jump in second-quarter
earnings to $11.6 billion, which fell just shy of Exxon's own record
earnings from 2007.

Exxon Mobil shares fell $2.81, or 3.3 percent, to $81.57 in morning trading.

Setting U.S. profit records has become commonplace for Irving-based
Exxon Mobil. The $11.68 billion topped its own U.S. record of $11.66
billion, posted in the fourth quarter of last year. Right behind that
was the $10.9 billion it reported to start 2008.

Exxon Mobil owns the record for at least the top six most-profitable
quarters for a U.S. company, as well as the largest annual profit.

The company, which produces 3 percent of the world's oil, got its
biggest boost from its exploration and production arm, where earnings
rose 68 percent to $10.01 billion from $5.95 billion a year ago. The
main driver was record crude prices, partially offset by lower sales
volumes and higher operating costs.

Once again, Exxon Mobil's results revealed a troubling trend at the heart of its business.

Production on an oil-equivalent basis fell 8 percent from a year ago —
a significant blow for a company that generates more than two-thirds of
its earnings from oil and gas production. That follows an opening
quarter of 2008 when the company said overall production fell 5.6
percent from a year ago.

Excluding last year's loss of its Venezuelan assets, a labor strike in
Nigeria and lower volumes because of production-sharing contracts,
Exxon said production was down about 3 percent in the most-recent
quarter.

Like its competitors, Exxon Mobil said it took a beating from lower
global refining margins. Earnings from refining and marketing fell 54
percent in the quarter to $1.55 billion.

For the first six months of 2008, Exxon Mobil said it earned $22.57
billion, or $4.25 a share, from $19.54 billion, or $3.45 a share, in
the first half of 2007. Revenue rose to $254.9 billion from $185.5
billion.