Exxon's output rises but refining weakness hits profit

Reuters

* EPS $1.79 v Street view $1.77

* Output up 1.5 percent, first gain since 2011 2nd qtr

* Shares rise 1 percent

By Anna Driver

Oct 31 (Reuters) - Exxon Mobil Corp, the world'slargest publicly traded oil company, reportedhigher-than-expected quarterly results on Thursday as outputrose for the first time in more than two years, but refiningweakness hurt earnings.

Exxon and other large oil companies struggling to boostproduction in recent years have spent heavily on new projects.In the first nine months of this year, Exxon alone spent $33billion.

"This is their first year-over-year (production) increase inmore than two years," said Brian Youngberg, an energy companyanalyst at Edward Jones in St. Louis. "It does show that theyare hopefully making some progress stemming the decline thatthey've shown the last couple of years."

Exxon last reported a quarterly gain in production in thesecond quarter of 2011.

Third-quarter oil and natural gas output rose 1.5 percentfrom a year earlier to 4 million barrels oil equivalent per day,helped by the start-up of new projects, the Irving, Texas,company said.

Natural gas from Australia's Kipper Tuna Turrum project and accelerated output from projects in Nigeria and Canada alsocontributed to the higher production.

Profit in the third quarter was $7.87 billion, or $1.79 pershare, compared with $9.57 billion, or $2.09 per share, a yearearlier.

Analysts on average had expected $1.77 per share, accordingto Thomson Reuters I/B/E/S.

"Weaker margins, mainly in refining, decreased earnings by$2.4 billion," Exxon said in a statement.

Oil companies with refining units, such as Exxon and RoyalDutch Shell, have seen profit hurt in the quarter asdemand for fuels like gasoline and diesel waned and globalrefining capacity grew.

Exxon's refining unit had a profit of $592 million in thelatest quarter, down sharply from $3.2 billion a year earlier.

The company's shares rose 1 percent to $89.68 in morning NewYork Stock Exchange trading.

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