It’s not easy being ExxonMobil Corp. The world’s largest publicly traded company’s share price dropped Thursday after the energy giant posted a higher-than-expected 10% drop in quarterly net income — even as it set a revenue record.

Reported net income for the quarter was $9.41 billion ($1.70/share), compared with $10.49 billion ($1.77) in 3Q2006. The results fell 5 cents short of energy analysts’ consensus expectations. Revenue rose 2.8% to $102.34 billion, topping the prior record of $100.72 billion, which was set two years ago. Capital spending rose 7.5% to $5.44 billion.

“ExxonMobil continued to actively invest in the third quarter, spending $5.4 billion on capital and exploration projects, an increase of 8% over 2006,” said Exxon’s Henry Hubble, vice president of investor relations, who presided over a conference call with energy analysts Thursday.

However, in the upstream Exxon’s profit fell 3% to $6.3 billion following a 2% drop in production on property sales and the loss of its Venezuelan assets. Venezuela took over Exxon’s 42% interest in its Cerro Negro project in June after both sides failed to come an agreement on turnover terms. Earnings from U.S. upstream operations were $1.2 billion, about $4 million higher than in 3Q2006. Excluding the U.S. upstream, earnings fell $198 million from a year ago to $5.1 billion.

Worldwide, gas volumes rose to 8.3 Bcf/d from 8.14 Bcf/d in 3Q2006. However, North American natural gas production declined. In the United States, gas output moved to 1.435 Bcf/d from 1.567 Bcf/d in 3Q2006. Canadian gas production declined to 735 MMcf/d from 864 MMcf/d a year ago. In the United States, gas prices fell to $5.79/Mcf from $6.71/Mcf in 3Q2006 and from $7.12/Mcf in 2Q2007.

Exxon also reported that it spent $7.8 billion to buy another 90 million of its common shares in the quarter.

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