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Energy heavyweight Exxon Mobil (XOM Free Exxon Stock Report) has recorded yet another solid earnings performance for first quarter of 2013. The Dow-30 staple earned $2.12 a share in the period, versus the year-earlier tally and our estimate, both at $2.00. There was a bit of a shift in the profit mix, compared with the prior-year quarter. The oil and gas production business earned less as a result of lower oil prices, but that was offset by more profits from chemicals manufacturing and a lower share count. The stock traded slightly lower nonetheless, largely due to investor concerns about global energy demand.

In terms of production, Exxon pumped 6% less natural gas and 1% fewer barrels of crude oil than in the previous-year period. The recurring sour note struck in the production trend has caused some investors to be less enthused about energy stocks in general. But, the large sums Exxon Mobil is investing in its pumping operations should minimize declines from maturing fields in the decade ahead, and could lead to modestly higher production.

Exxon also closed on the $3.1 billion acquisition of Celtic Exploration, based in Calgary, during the quarter. The move boosts western Canadian natural gas and natural gas liquids (NGLs) production and reserves. Exxon may be taking a longer-term view of eventually exporting natural gas from the west coast of Canada to better-paying markets in Asia, as well. The company will likely work with its Canadian affiliate, Imperial Oil, to see if such a strategy is feasible.

Downstream, the refining business saw profits edge lower versus the 2012 tally, likely as a result of lower sales following the restructuring of the company's interests in Japan. But, as touched on above, higher profits from the chemicals division were a plus.

Of further note was the progress of Exxon's massive share-repurchase program. The company bought back 63 million shares for $5.6 billion in the first quarter. Of that, $5.0 billion went toward reducing the share count, with the remainder used to acquire stock for corporate benefit plans. While the value of share repurchases is often debated, there is no doubt the practice has been accretive to Exxon's share earnings. To wit, absent stock buybacks in the past year, first-quarter earnings would only have come in at $2.01 a share, rather than $2.12.

We are making no changes to our profit estimate at this time, which calls for Exxon Mobil to earn $8.15 per share in 2013. The stock is best suited for conservative, long-term investors looking for broad exposure to the energy industry.

About The Company: Exxon Mobil Corp. is the largest publicly traded oil company in the world. It also owns 69.6% of Imperial Oil (Canada). Daily production in 2012 was as follows: crude oil, 2.4 million barrels (+1% vs. ’11); natural gas, 12.1 billion cubic feet (+31% vs. ’11). The average realized 2012 prices in the U.S. were: oil, $55.54 per barrel; natural gas, $3.85 per mill. cubic feet. Reserves as of 12/31/12 were 24.8 billion barrels of oil equivalent, 47% oil, and 53% gas. The reserve life at current production rates is about 15 years. The 10-year average reserve replacement rate is 121%. The daily refinery runs in 2012 were as follows: 5.3 million barrels (-2% vs. ’11); product sales, 6.4 million barrels (flat vs. ’11); chemical sales, 25.9 million tons.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.