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Exxon Profit Falls 23% as Sales Rise on Gas Prices

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From Bloomberg News

Exxon Mobil Corp.’s profit fell 23% in the first quarter, the world’s largest publicly traded oil company reported Thursday. Record U.S. gasoline prices resulted in the highest first-quarter refining earnings in 13 years.

Net income fell to $5.44 billion, or 83 cents a share, from $7.04 billion, or $1.05, a year earlier, Irving, Texas-based Exxon said. In the year-earlier period, Exxon had $2.2 billion in gains from an accounting change and the sale of its stake in Germany’s Ruhrgas. First-quarter sales rose 6% to $67.6 billion.

U.S. gasoline prices surged as a strengthened economy stoked demand and stricter limits on sulfur content crimped fuel supplies. Chief Executive Lee R. Raymond delivered per-share earnings that were 3 cents higher than the highest estimate from 19 analysts surveyed by Thomson First Call. Exxon’s refining profit rose 39% to $1 billion.

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“It would be hard to improve overall on this kind of quarter,” said James Halloran, who helps manage $33 billion, including more than 15 million Exxon shares, at National City Private Client Group in Cleveland. Refining “did very well, and chemicals did well relative to what a couple of their competitors did.”

“Earnings on the refining and marketing side of the business were significantly above expectations,” said Tim Ghriskey, chief investment officer at Solaris Asset Management. “Anybody who goes to the gas pump these days shouldn’t be surprised.”

Excluding the year-earlier gains, first-quarter profit rose 14%.

Shares of Exxon fell 58 cents to $42.54 on the New York Stock Exchange. The stock touched a two-year high Tuesday.

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Profit from oil and natural-gas production rose $20 million to a record $4.01 billion as output rose 1% to the equivalent of 4.55 million barrels of oil a day.

Crude-oil futures traded in New York averaged $35.25 a barrel in the first quarter, up 4.3% from a year earlier, and reached a 13-year high last month.

First-quarter production of oil and gas liquids rose 5% to 2.64 million barrels a day as output increased in Chad and at Norway’s Ringhorne field. Output in Venezuela also rose from a year earlier, when a national strike curbed production.

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Gas production slid 4.8%, and U.S. gas output fell 15% to 2.05 billion cubic feet a day.

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