August 1, 2008 in Business

Exxon Mobil posts record quarterly profit of $11.7 billion

It’s not enough for investors, though; stocks tumble
By JOHN PORRETTO Associated Press

At a glance

Soaring sales

Total sales for Exxon Mobil for the second quarter were $138 billion – roughly the gross domestic product of Hungary.

HOUSTON – Exxon Mobil reported the fattest operating profit in U.S. corporate history Thursday but took a beating anyway – from politicians railing against Big Oil, drivers bleeding cash at the pump and investors who expected more.

The world’s largest publicly traded oil company turned a profit of $11.7 billion for the second quarter, lifted mostly by meteoric crude prices.

Its earnings were up 14 percent from a year ago.

Henry Hubble, Exxon Mobil’s vice president for investor relations, said the record profits “highlight the quality of our integrated business model and disciplined investment approach.”

For the most part, the plaudits ended there.

Despite their heft, Exxon’s profits were a disappointment on Wall Street, and the company’s stock slumped nearly 5 percent. Almost the entire energy industry was walloped by investors Thursday.

European rival Royal Dutch Shell posted its own record profit across the Atlantic, with earnings of $11.6 billion.

Its American depository receipts tumbled nearly 4 percent in afternoon trading.

Growing investor apprehension can be found at the heart of what the oil industry does – finding and producing oil and natural gas.

Exxon Mobil’s overall output fell 8 percent in the second quarter from a year ago – a significant blow for a company that generates more than two-thirds of its earnings from oil and gas production.

For Exxon Mobil, which produces 3 percent of the world’s oil, finding new deposits of hydrocarbons is getting harder and harder.

State-run oil companies like those in Saudi Arabia and Venezuela control about 80 percent of known global oil reserves.

It’s difficult if not impossible for Exxon and its competitors to get any part of that oil.

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