Investors punished Exxon Mobil on Friday after the oil major's latest quarterly report added to a growing string of earnings disappointments.
The oil major's profit has now fallen short of Wall Street's expectation in four of the last five quarters. This latest earnings miss came as Exxon surprised analysts with a heavier-than-anticipated maintenance schedule for its fleet of oil refineries — even though that turnaround activity was scheduled.
Exxon's profits jumped 18 percent to nearly $4 billion in the second quarter, as the ongoing rebound in crude prices bolstered its business producing oil and gas. But the maintenance weighed on earnings in its division that refines and sells fuels like gasoline, while weaker profit margins in its chemicals segment also dragged on the bottom line.
Shares of the world's largest publicly listed oil company had recently been recovering. However, Exxon's stock price for the year fell back into the red after the report, lagging its Big Oil peers in Europe and fellow U.S. oil major Chevron, which also reported disappointing quarterly earnings on Friday.
Investors sent the stock down 2.8 percent to $81.92 on Friday.
Exxon's earnings per share came in at 92 cents, short of estimates for $1.27 in a Thomson Reuters survey of analysts. The company reported revenues of $73.5 billion, topping analyst estimates by about $900 million.
Neil Chapman, senior vice president at Exxon, said many had expected that profits would have been up by more than $1 billion based on the boost from higher oil prices alone. However, maintenance in Saudi Arabia, France, the United States and Canada led to significant downtime during the quarter.
"What the analysts would not have understood is we had an enormous amount of planned maintenance in our business in the quarter, largely affecting our refining business," Chapman told CNBC's "Squawk Box" on Friday.
Exxon warned analysts during a conference call that they should expect some significant maintenance in the coming quarters, partly to prepare for upcoming changes in emissions standards for shipping.
Chapman also addressed operational problems in Exxon's refinery business that led to costly downtime in recent quarters and carried over into the latest period.
"We are not happy about it. We're all over it," he said. "We thoroughly investigated. There was nothing systemic in these incidences."
The company posted a profit of $29 million in its international refining and marketing business, down from more than $1 billion a year ago. That weighed on profits in the global refining and marketing business, which was down by nearly a half from a year ago to $724 million.
Earnings for Exxon's chemicals business were also down, falling to $890 million from $985 million a year ago, mostly due to weaker profit margins and higher costs.
Meanwhile, profits in the company's upstream business — which focuses on exploring for and developing oil — more than doubled to over $3 billion.
At the same time, Exxon's total oil and gas production fell by 7 percent from a year ago. That was due to falling natural gas output, which Exxon chalked up in part to downtime in Qatar and Australia, as well as in Papua New Guinea, where an earthquake disrupted the company's liquefied natural gas operations.
But the drop in natural gas production was partly by design, according to executives. Chapman told analysts the company is scaling back gas output in its U.S. shale fields and instead focusing on producing higher-value crude oil.
Exxon saw capital expenses and spending on exploration for oil and gas surge 69 percent to $6.6 billion in the quarter, driven by investments in the U.S. Permian basin, Brazil and Indonesia.
"Key projects in Guyana, the U.S. Permian Basin, Brazil, Mozambique and Papua New Guinea are positioning us well to meet the objectives we outlined in our long-term earnings growth plans. The high quality of these resources, combined with our strengths in project execution and innovation, will generate strong value over time," Exxon CEO and Chairman Darren Woods said in a statement.