Oil company profits soar

By Tom Bergin and Michael Erman

LONDON/NEW YORK (Reuters) - Exxon Mobil broke its own record for the highest-ever quarterly profit for a U.S. company on Thursday, but it was lower than Wall Street expected largely due to lost output from Venezuela and Nigeria and lower yields from some oil fields.

The average price of a barrel of oil was slightly less than $125 in the quarter, nearly double last year, which also increased earnings reported by three of Europe's largest oil companies, Royal Dutch Shell, Eni and Repsol.

Exxon's second-quarter net income rose 14 percent to $11.68 billion (5.88 billion pounds), or $2.22 a share, in the quarter.

However, after excluding one-time items, Exxon earned $2.27 a share, more than 10 percent below analysts' expectations, according to Reuters Estimates. The miss led to a 4.7 percent slide in Exxon's shares, a major factor in a decline in U.S. stocks on Thursday.

Shell, the world's second-largest non-government controlled oil company by market value, reported a 5 percent rise in second-quarter earnings to $7.9 billion, and said that excluding one-time items, it beat analysts' forecasts.

The companies' oil and gas exploration and production units were the main profit drivers because of high oil prices.

But despite billions of dollars in capital spending in the quarter, oil and gas production was sluggish. That, along with weak profit margins from refining, restrained the companies' earnings somewhat.

Western oil companies' output has fallen in recent years and oil producing countries now prefer to award their richest fields to their own national oil companies.