ExxonMobil profit sinks in first quarter

US oil giant ExxonMobil said Thursday that first-quarter earnings dropped 11 percent as production fell and exploration costs rose. The quarter was also hurt by Europe's sluggish economies and tight margins in Asia, said the world's biggest energy company by market capitalization. Earnings were $9.5 billion in the first three months of the year, compared with $10.7 billion in the year-ago period, and included roughly $400 million in asset sales, ExxonMobil Corporation said in a statement. Oil-equivalent production of oil and gas fell more than five percent, offsetting gains from high oil prices. A surge in operational expenses, to $1 billion, also contributed to the weak quarter. Earnings of $2.00 a share widely missed Wall Street expectations of $2.09. Revenue rose nine percent to $124.0 billion, slightly below estimates. A bright spot was earnings for non-US downstream operations, oil and gas operations that occur after the production phase: They more than doubled from a year ago, to $983 million. "Despite continuing economic uncertainty, we are progressing our robust investment plans to meet the energy demands of the future," Rex Tillerson said in the statement. Exxon reported $8.8 billion in capital and exploration spending, up 13 percent from the 2011 first quarter. Exxon purchased $5.7 billion in shares, including $5 billion to reduce its shares outstanding. For the second quarter, the company said it expected to spend $5 billion on share purchases to reduce shares outstanding. In a conference call, the head of Exxon's investor relations, David Rosenthal, highlighted that the first-quarter earnings were damped by weakness in the European economy and tight margins in Asia. Shares in the blue-chip Dow member were down 1.0 percent at $85.98 in afternoon trading.