ExxonMobil 2Q profit falls a surprising 66%

ExxonMobil said Thursday its second-quarter profit fell a surprising 66% from a year ago, as the world's biggest publicly traded oil company, like the rest of the industry, saw crude and gas prices fall sharply and refining margins tighten.

ExxonMobilXOM, based in Irving, Texas, said earnings for the April-June period came to $3.95 billion, or 81 cents a share. That was down from $11.68 billion, or $2.22 a share, a year ago, a record at the time.

Excluding one-time items, net income in the most-recent quarter amounted to $4.09 billion, or 84 cents a share.

Analysts polled by Reuters were looking for net income of $1.02 a share. Those estimates typically exclude one-time items.

Revenue fell 46% to $74.5 billion from $138.1 billion a year ago. Analysts, on average, had forecast revenue of about $71.3 billion, Reuters said.

The substantial profit falloff was no surprise given the steep drop in oil and natural gas prices from a year ago. Major integrated oil companies ConocoPhillipsCOP, BP BP and Royal Dutch Shell RDS.A have already reported that profits fell between 53% and 67% in the second quarter.

Yet the size of Exxon's decline is sure to catch investors off guard.

This time last year crude was in the triple digits after a historic ride to almost $150 a barrel. Prices eventually dipped into the $30s in January but have doubled in recent months amid some signs of recovery from the worst recession in a generation.

"Global economic conditions continue to impact the energy industry both in the volatility of commodity prices and reduced demand for products," ExxonMobil Chairman and CEO Rex Tillerson said.

Oil giants like ExxonMobil are still notching billions of dollars in profits, but topping last year's mammoth numbers is almost unthinkable unless crude goes on another unprecedented ascent. That's unlikely given the state of the global economy.

For the first six months of 2009, ExxonMobil said it earned $8.5 billion, or $1.73 a share, down roughly 62% from the $22.6 billion, or $4.24 a share, it made in the first half of 2008. Revenue declined to $138.5 billion from $254.9 billion.

Other companies, including Kellog and MasterCard offered more upbeat earnings Thursday. KelloggK says its profit rose 13% in the second-quarter, though sales of its popular cereal and snack products fell, boosted by higher prices and cost cuts.

The Michigan-based company says its profit rose to $353 million, or 92 cents a share, from $312 million, or 82 cents a share last year. That beat analyst expectations of 83 cents a share.

MasterCard MA said it booked a profit of nearly $350 million during the second quarter, also exceeding Wall Street's expectations.

The Purchase, New York-based credit card and global payments processor earned $348.9 million, or $2.67 a share, in the period ended June 30. That compares with a loss of $746.7 million, or $5.70 a share, in the same period a year earlier.