Exxon's second-quarter profit breaks its own record

Exxon Mobil Corp. posted second-quarter earnings Thursday of $11.68 billion, once again topping its own record for the biggest three-month profit ever by a U.S. corporation.

Still, the massive income at the world's largest publicly traded oil company pleased hardly anyone. Production fell during the quarter, and financial analysts had been expecting better earnings -- two factors that helped push the company's stock down $3.95, or 4.7%, to $80.43 a share.

Activists renewed their complaints that Exxon and other oil companies weren't investing enough to find new oil that would bring pump prices down, instead preferring to drill for wealth on Wall Street by purchasing their own stock.

In the quarter that ended June 30, the Irving, Texas, oil giant spent $8 billion buying back shares of its stock, compared with the $7 billion Exxon invested in exploration and other projects. The company also paid stockholders dividends worth $2.1 billion during the period.

"Exxon is pumping cash, not oil," said Judy Dugan, research director at Consumer Watchdog, based in Santa Monica. "The big oil companies are wallowing in cash, and Exxon is the most aggressive in buying back its stock instead of taking the risks it should to both find new oil and develop new forms of energy."

The company said its capital outlay was 38% higher than in the second quarter of 2007.

"We're investing in any project that we have ready for funding. We do that first. Then the money that's earned in our business is the shareholders' money, and we return it to the shareholders," Exxon Vice President Henry Hubble said in a conference call with reporters. "We'd like to do more" to increase energy supplies and would do more if the company had access to off-limits areas, he said.

Royal Dutch Shell also reported second-quarter earnings Thursday, posting 33% higher profit of $11.6 billion. The Anglo-Dutch company said that Nigerian unrest damped production during the quarter and that its net investment in projects totaled $5.7 billion. Shell gave $3.8 billion back to shareholders through stock repurchases and dividends during the quarter.

This week London's BP and ConocoPhillips of Houston also reported sharply higher second-quarter profits. Chevron Corp. -- rounding out the list of the so-called Big Five oil firms -- is expected to follow suit when it releases results today.