Bad letdown.

Exxon Mobil Corp. (XOM) on Friday, July 27, reported second quarter earnings of 92 cents per share, missing analysts' estimates of $1.27 per share. The company beat analysts' estimates on revenue, however, posting $73.5 billion versus the $71.4 billion expected by company watchers surveyed by FactSet Research Systems Inc.

Exxon's stock fell almost 3% to $81.91 share as trading began on Friday following the news. 

Chairman and CEO Darren Woods blamed the quarter's lackluster results largely on "scheduled maintenance to support operational integrity." The chief executive also said its extended recoveries from first quarter operational incidents in its downstream segment were "disappointing," even though it was pleased with the return to full production following an earthquake in Papua New Guinea. 

Management echoed that sentiment on Friday's conference call with analysts, warning that maintenance would be heavier through the back half of 2018 and into 2019 than previous years. 

Exxon would do well to better warn the market of specific future maintenance shutdowns to prevent the volatility in its stock, Bank of America Merrill Lynch analyst Doug Leggate said during the Q&A segment of the call. 

Houston-based Exxon's second quarter earnings of $4 billion represent a 20% increase over the $3.2 billion the company earned in the second quarter of 2017. 

The company increased spending in 2018, noting Friday its capital and exploration expenditures were $6.6 billion, up 69% year over year due to investments in Brazil, west Texas' Permian Basin and Indonesia.

Exxon's upstream unit posted $3.04 billion in earnings during the second quarter, up $1.86 billion from the same quarter in 2017 but down $457 million sequentially. 

And the company's downstream business earned $724 million, a $661 million decrease from a year ago and a $216 million drop from the prior quarter. 

Finally, the company's chemicals segment posted $890 million in earnings, down $121 million from last quarter and $95 million from the same quarter last year. 

Exxon on Friday reiterated a recent joint venture deal with Plains All American Pipeline LP (PAA) , which will construct a pipeline system to transport more than 1 million barrels of crude oil and condensate per day from multiple locations in the U.S. Permian Basin to the U.S. Gulf Coast. 

Investors over the past six months have raised concerns with the shipping difficulties in the Permian Basin, caused by a lack of necessary infrastructure to move crude from West Texas to export locations along the Gulf of Mexico. 

These takeaway constraints have led to a widening of the gap, or differential, between the price of crude in Midland, Texas — the heart of the Permian basin — and Cushing, Okla., where U.S. crude futures are priced. 

Heading into the second quarter earnings cycle, Seaport Global Securities LLC analysts said they will look to U.S. producers to better clarify the Permian differential and infrastructure concerns. 

"We're still reticent on jumping back into the basin with both feet given the lack of clarity on how the space will look (and how investors will react) when actual physical constraints do come to fruition; we're not there yet despite the Mid-Cush differential hitting $16/bbl this week," the analysts wrote in a July 25 note to clients. "We've heard compelling arguments for both the Armageddon scenario - shut-ins galore with no gas flaring allowed (see our CDEV note); and also for the all-clear scenario — the midstream industry saves the day with quicker-than-anticipated solutions."

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