The earnings of $9.3 billion were the company's highest ever for the first quarter and beat Wall Street expectations, but revenue slipped and fell well short of analysts' forecasts.
Investors pushed Exxon Mobil shares to a new 52-week high of $80.49 a share in morning trading on the New York Stock Exchange. By early afternoon, the shares were up 23 cents to $80.15 a share. They've traded as low as $56.64 in the past year.
Net income for the January-March period amounted to $1.62 per share. That was up from $8.4 billion, or $1.37 per share, a year ago. Analysts polled by Thomson Financial were looking for a profit of $1.52 per share.
Revenue fell to $87.2 billion from $88.9 billion a year earlier, well below the $100 billion analysts had forecast. Like other major oil companies, Exxon Mobil was hurt by lower oil and natural gas prices to start 2007 compared with a year ago.
Last year, the Irving, Texas-based company posted the largest annual profit by a U.S. company — $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion, set in 2005.
Last month, Exxon Mobil said it will spend some of that money on more than 20 new global projects in the next three years, investments expected to add 1 million oil-equivalent barrels a day to the company's volumes at peak production.
The company said its spending tab for capital and exploration projects in the first quarter was $4.3 billion and that its plans to spend roughly $20 billion this year on such projects were on track.
"In the first quarter, Exxon Mobil continued to actively invest, bringing additional crude oil, finished products and natural gas to market," Exxon Mobil Chairman and Chief Executive Rex Tillerson said in a statement.
Exxon Mobil was the third major oil company to report earnings in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profit rose 7.7 percent, but the result was propped up by asset sales as it also was hurt by lower commodity prices.
Exxon Mobil said earnings from its exploration and production arm — known as the upstream side of the business — were $6 billion, compared with $5.7 billion a year ago, primarily reflecting lower oil and natural gas prices and decreased demand for natural gas in Europe.
Exxon Mobil said oil production in the first three months of 2007 was slightly higher than a year ago, helped in part by increased production from projects in West Africa, Russia and the Middle East.
Natural gas production, however, was off from last year, hampered by mature field declines and lower European demand related to weather.
In a conference call with analysts, Henry Hubble, Exxon Mobil's vice president of investor relations, said the company continued to work toward turning over operational control of a joint venture project in Venezuela to its partner, Petroleos de Venezuela SA, Venezuela's government-controlled oil company. Earlier this year, Venezuelan President Hugo Chavez ordered by decree the takeover of oil projects run by foreign oil companies in the oil-rich Orinoco River region. He promised to occupy the fields in the region and fly the national flag over them by May 1.
But Hubble said discussions continue over the ownership stake of its Venezuelan operations. BP, Chevron Corp., ConocoPhillips, France's Total SA and Norway's Statoil ASA also have projects in the country.
"Those negotiations are continuing and will be for some time," Hubble said. He declined to speculate whether Exxon Mobil would continue to do business in Venezuela after such discussions are finished.
On the refining and marketing side of the business — known as the downstream — Exxon Mobil's earnings rose to $1.9 billion from $1.3 billion to start 2006, lifted by improved refining and marketing margins and more efficient refining operations.
A company's refining margin is the difference between what it costs to refine crude oil and what the company makes selling refined products, such as gasoline and jet fuel.
Exxon Mobil said it also saw improved profit margins at its chemicals business, where earnings of $1.2 billion were up from nearly $1 billion in the year-ago quarter.
During the first quarter, Exxon Mobil said it bought 108 million shares of its common stock at a cost of $8 billion. Shares outstanding were reduced from roughly 5.7 billion from at the end of 2006 to 5.6 billion at the end of March.
Exxon Mobil said it ended the first quarter with $34.6 billion in cash and $8.8 billion in debt.