Exxon Mobil net income slips 1% to $10.26 billion

Don’t let Exxon Mobil Corp.’s 1% drop in second-quarter profit fool you. It was still the fourth-best quarterly result for an American company ever. And analysts say the company’s massive global footprint points to more big quarters.

The world’s largest publicly traded oil company said Thursday that lower natural gas prices and a drop in production hurt results for the April-June period, contributing to a rare miss of Wall Street expectations.

But Exxon Mobil’s net income of $10.26 billion was still eye-popping and off only slightly from the $10.36 billion it earned in the second quarter of 2006 -- the third-best U.S. quarterly result. It already holds the record for the No. 1 quarterly and annual profits.

On a per-share basis, Irving, Texas-based Exxon Mobil reported earnings of $1.83 a share in the most recent quarter, up from $1.72 a year earlier, reflecting about 7% fewer shares on the market because of a stock buyback program.

Revenue slipped to $98.35 billion from $99.03 billion a year earlier.

The earnings fell short of the forecast of $1.96 a share by analysts polled by Thomson Financial, but revenue topped the prediction of $97.6 billion.

Exxon Mobil shares followed the broader market downward and fell $4.56, or 4.9%, to $88.23 on Thursday. The shares, which have risen about 20% since the first of the year, have traded in a 52-week range of $63.87 to $93.62.

“The fundamentals of our business are strong, and we saw continued good operational performance in the quarter,” Henry Hubble, the company’s vice president for investor relations, said in a conference call with analysts.

Brian Youngberg, an energy analyst at Edward Jones in St. Louis, called Exxon Mobil’s results disappointing and noted that its share price continued to benefit from an aggressive buyback strategy. Exxon Mobil’s quarterly decline came on the same day European competitor Royal Dutch Shell said its net profit rose 18% in the second quarter to $8.67 billion.

But Youngberg cautioned against reading too much into Exxon Mobil’s outcome.

“I think for now they’re still the 800-pound gorilla,” he said. “They have the strongest balance sheet. They have the most cash on hand. They’re the big dog, and I think that will continue for the foreseeable future.”

Exxon Mobil Chairman and Chief Executive Rex Tillerson has said the company is spending the bulk of its profit on finding and producing new supplies of crude oil and natural gas, rather than alternatives, to meet the rising global demand for energy. The company has said it will invest in more than 20 new global projects in the next three years; its capital spending is forecast to be $20 billion a year through the end of the decade.