ExxonMobil Corporation said at the weekend that its production capacity in Nigeria fell short of target by three per cent "due to strikes and lower entitlement volumes."

The oil giant, however, disclosed that its "second-quarter net income rose 14 per cent to $11.68 billion, or $2.22 a share from $10.26 billion, or $1.83 a share in the year-ago period."

Available data on the company's revenue fir the second quarter of the year indicated that the oil multinational, "net income, excluding items, rose to $2.27 a share from $1.83 a share. Capital expenditures rose 38 percent to $6.97 billion."

This figure, however, fell short of the market analysts' forecast industrial average, which showed that the company was expected to earn $2.46 a share for the period.

"On an oil-equivalent basis, second-quarter production decreased 8 percent from the second quarter of 2007," Daily Independent gathered.

It cited record oil and natural gas prices, but noted rising costs and lower margins in the company's refining and chemical units.

Excluding impacts related to the Venezuela expropriation, it noted that the "Nigeria labour strike and lower entitlement volumes made production fell by 3 percent."

The world's largest publicly traded oil company said net income for the April-June period came to $2.22 a share, up from $10.26 billion, or $1.83 a share, a year ago.

Revenue rose 40 percent to $138.1 billion from $98.4 billion in the year-earlier quarter.

Excluding an after-tax charge of $290 million related to an Exxon Valdez court settlement, earnings amounted to $11.97 billion, or $2.27 per share.

Analysts on average expected ExxonMobil to earn $2.52 a share on revenue of $144 billion, according to a survey by Thomson Financial. The estimates typically exclude one-time items.

The record-setting results were largely expected, given that crude prices in the second quarter were nearly double what they were a year ago. Natural gas prices were significantly higher too.

But, investors expected even bigger profits, especially after Europe's Royal Dutch Shell reported a 33 percent jump in second-quarter earnings to $11.6 billion, which fell just shy of Exxon's own record earnings from 2007.

Exxon Mobil shares fell $2.24, or 2.6 percent, to $82,14 in morning trading.

Setting U.S. profit records has become commonplace for Irving-based ExxonMobil. The $11.68 billion topped its own U.S. record of $11.66 billion, posted in the fourth quarter of last year. Right behind that was the $10.9 billion it reported to start 2008.

Exxon Mobil owns the record for at least the top six most-profitable quarters for a U.S. company, as well as the largest annual profit.

The company, which produces 3 percent of the world's oil, got its biggest boost from its exploration and production arm, where earnings rose 68 percent to $10.01 billion from $5.95 billion a year ago. The main driver was record crude prices, partially offset by lower sales volumes and higher operating costs.

Once again, Exxon Mobil's results revealed a troubling trend at the heart of its business.

Production on an oil-equivalent basis fell 8 percent from a year ago - a significant blow for a company that generates more than two-thirds of its earnings from oil and gas production. That follows an opening quarter of 2008 when the company said overall production fell 5.6 percent from a year ago.

Excluding last year's loss of its Venezuelan assets, a labour strike in Nigeria and lower volumes because of production-sharing contracts, ExxonMobil said production was down about 3 percent in the most-recent quarter.