Exxon Mobil Just Surprised Wall Street With This Big Miss by Reuters @FortuneMagazine July 29, 2016, 10:00 AM EDT E-mail Tweet Facebook Linkedin Share icons Exxon Mobil xom , the world’s largest publicly traded oil producer, posted a lower-than-expected quarterly profit on Friday due to weak crude prices and refining income, reflecting the broad malaise in the energy sector. Net income slumped to $1.7 billion, or 41 cents per share, in the second quarter, from $4.19 billion, or $1 per share, in the year-ago period. Analysts, though, expected earnings of 64 cents per share, according to Thomson Reuters I/B/E/S. The earnings miss surprised Wall Street, and Exxon shares fell 2.5% in morning trading. The company is normally known for hitting earnings targets and the miss was its first since the second quarter of last year. Production during the quarter fell about 0.6% to 3.9 million barrels of oil equivalent per day (boe/d). While Exxon slashed its capital budget by 38% during the quarter, to $5.16 billion, cost cuts were not enough to offset depressed oil prices, which have dragged down huge swaths of the commodities sector. Exxon’s profit from producing oil and gas fell about 85% to $294 million. In the United States, where Exxon is the largest natural gas producer and a major oil producer, the company lost money. In the refining unit, which has been hammered by growing fuel inventories and weak demand, Exxon’s profit fell more than 60% due to shrinking margins. In previous quarters in this downturn, before fuel inventories swelled, the refining unit had helped insulate Exxon from falling crude prices. Rex Tillerson, Exxon’s chief executive officer, said the overall results reflected the “volatile industry environment,” but defended the company’s integrated business model, where oil production and refining are under the same umbrella. Earlier this month Exxon said it would pay more than $2.5 billion in stock for InterOil, expanding its push into the Asian liquefied natural gas market.