Exxon Mobil Corp. (NYSE: XOM), the No. 1 U.S. energy producer, reported first-quarter profit fell 10.7 percent compared to the same quarter last year on decreased production and higher expenses for capital and exploration. The results surprised the market.
Net earnings fell to $9.4 billion, or $2 per share, from $10.65 billion, or $2.14 per share, in the year-earlier period, according to the report.
Analysts surveyed by Thomson Reuters had estimated first-quarter income would be $2.09 per share.
Production fell 5 percent, while capital and exploration expenditures rose 13 percent to $8.8 billion. The drop in production was offset financially by gains due to rising oil prices.
The Houston-based oil and gas producer said production would decline by 3 percent this year, but that new projects being implemented would increase production by as much as 2 percent annually until 2017.
The projects include the Kearl oil sands project in Angola, three Nigerian platforms and an ice-resistant platform in Russia.
Shares fell $1.26 to $85.59 in afternoon trading. Exxon Mobil, with a market capitalization of $403.4 billion, is the world's second most valuable company, behind Apple's (Nasdaq: AAPL) $564.8 billion.
(Reuters contributed to this story.)