Exxon Mobil's Profit Jumps 38 Percent as Oil Prices Rise

Exxon Mobil Corp. said Thursday its quarterly profit jumped 38 percent as oil prices rose in the first three months of the year.

That marks the first year-over-year increase in profits for Exxon since it posted an all-time record of $14.83 billion in the third quarter of 2008.

Still, earnings remain significantly below that level. During the first three months of this year, the Irving, Texas, oil giant had a profit of $6.3 billion, or $1.33 per share. That compares with $4.55 billion, or 92 cents per share, in the same period last year. Two years ago, Exxon earned $10.89 billion in the first quarter.

Revenue jumped 41 percent to $90.25 billion. Analysts had expected earnings of $1.41 a share on revenue of $96.41 billion.

Exxon's profit relied heavily on its exploration and production of oil and gas. Oil prices surged over the past 12 months, jumping from a low of $33 a barrel in the first quarter of 2009 to more than $80 a barrel this year. The company responded to the rise in price by pumping more from the ground.

Production of oil and natural gas increased 4.5 percent from the first quarter of 2009. New operations in Qatar came online. helping to boost profits even though natural gas prices had flattened from the previous year.

Exxon's refineries struggled, however, especially those located in the United States. American petroleum consumption dropped in the first quarter, and refineries had trouble passing the higher oil costs along to consumers.

The company's U.S. downstream operation, which includes refineries, lost $60 million in the first quarter, compared with a profit of $352 million in the year-ago period.

Meanwhile, Exxon's chemicals business more than tripled its profits in the quarter to $1.25 billion. Exxon said it benefited from stronger profit margins and higher sales volumes. The company also said corporate and financing expenses nearly doubled to $800 million, primarily because of new health care benefits now required in the U.S.

During the quarter, Exxon continued to expand its business, increasing capital and exploration spending 19 percent year-over-year to $6.9 billion. Exxon said it plans to complete its acquisition of natural gas producer XTO by the end of the second quarter.