Updated from 9:22 a.m. EDT
third-quarter earnings dropped 10% from a year ago as lower refining margins, an industry-wide theme, hit its results.
The integrated oil giant earned $9.41 billion in the third quarter, or $1.70 a share, down from last year's $10.49 billion and $1.77 a share. Analysts surveyed by Thomson Financial were looking for $1.75 in the latest quarter.
Shares of Exxon were losing 2.8% to $89.42 in afternoon trading Thursday.
The decrease in profits, Exxon said, "reflected lower downstream and chemical margins partly offset by higher crude oil realizations."
Earnings from upstream operations were $6.30 billion, down $194 million from the third quarter of 2006. Lower natural gas realizations and higher operating expenses were to blame for the downturn, Exxon stated in a press statement.
During the quarter, Exxon earned a realized price per barrel of $71.46, up $6.42 from the same period last year, according to Henry Hubble, vice president of investor relations, who spoke on a conference call.
The company's production of liquids lagged during the quarter, falling by 110,000 barrels a day from last year. Venezuela's expropriation of Exxon's drilling installations last spring was responsible for the fall, Hubble said.
In September, Exxon filed a request with the International Center for Settlement of Investment Disputes seeking arbitration for its losses in Venezuela. The issue has not yet been resolved.
Downstream earnings were $2 billion last quarter, down from $2.74 billion a year ago, driven by lower refining and fuels-marketing margins.
Revenue for the quarter did rise, however, reaching $102.34 billion, up from $99.59 billion in the same period of 2006. Worldwide, quarterly oil equivalent production slipped to 3.92 million barrels a day from 4 million barrels last year.
Exxon spent $5.4 billion on capital expenditures in the quarter, up 8% year over year.
Also, Exxon completed two major E&P projects during the period. The first was the Ormen Lange natural gas project in Norway, which could produce 2 billion cubic feet of gas a day once its fully online. The other is the Marimba North project offshore Angola which is projected to contain 80 million barrels of oil.
Exxon spent $7.8 billion to repurchase 90 million shares in the third quarter.