Driven in part by rising gas prices Exxon Mobil profits rose 41% over the prior year’s profits. Exxon Mobil on Thursday reported a profit of $10.7 billion in the second quarter. Royal Dutch Shell also reported higher profits. Excluding one-time items and inventory gains, Shell earned $6.3 billion, up 30 percent from the first quarter of 2010 even as production dropped 3 percent.
Even with the nearly 11 billion dollar profits, Exxon’s earnings estimates fell short of what was predicted. Exxon Mobil’s earnings per share were $2.18 in the second quarter, 15 cents shy of the $2.33 consensus of analysts surveyed by Thomson Reuters. With sky high oil prices and great refining margins, Exxon is at a point where little more can go right,” said Dan Dicker, former oil trader and author of “Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy.”
“It’s tough to improve on perfection and the shares are anticipating that they can’t and are heading down, despite the good report,” he said.
Though the profits are great for Exxon it doesn’t sit well with Washington and Americans as it poured fuel on the political fires in Washington as lawmakers and the White House condemned the companyâ€™s tax breaks and complained about high oil prices. Rep. Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee, said the profits show that the oil industry doesnâ€™t need long-standing tax incentives for exploration and production.
“What is good for the biggest oil companies isnâ€™t always whatâ€™s good for American taxpayers,” he said in a statement. “The American people are getting tipped upside down at the pump, then asked to fork over whatever change, they have left to subsidize these oil behemoths.”
Natural gas is also a heavy contributor to Exxon’s revenue. While Exxon produced, on average, 2.35 million barrels of oil per day during the second quarter, its daily quota of natural gas was 12.36 billion cubic feet. The company also said that its spending on oil exploration soared 58% in the second quarter to a record high of $10.3 billion.