Major oil companies in U.S. yesterday reported drop in earnings during third quarter. ExxonMobil Corp, the No. 1 U.S. oil company, yesterday posted a 22.6 per cent decline in third-quarter earnings, with a downturn in demand, as well as overproduction by the Opec group, contributing to falling prices for crude oil.

ExxonMobil, based in Irving, Texas, said profits, excluding special items and merger effects, fell to $3.32 billion, or 48 cents a diluted share, from $4.29 billion, or 60 cents a diluted share, a year earlier.

Wall Street had expected the company to report earnings of 45 cents to 54 cents a share, with a consensus forecast of 50 cents, according to research firm Thomson Financial/First Call.

The oil major's revenue fell to about $53 billion from $58.568 billion a year before.

ExxonMobil shares closed Monday trading on the New York Stock Exchange at $41.12. During the third quarter, the shares fell 9.80 per cent, in line with the 9.84 per cent decline in the Standard & Poor's Oil index.

The company said that including merger effects, third-quarter net income fell to $3.18 billion from $4.49 billion a year ago.

Chairman Lee Raymond said the company's results, which were toward the lower end of the range of estimates on Wall Street, came in an "adverse economic and commodity price environment." Prices for both crude oil and natural gas fell during the quarter.

Northeastern oil refiner and marketer Sunoco Inc said operating earnings fell 16 per cent, as above-average profit margins for gasoline were unable to completely offset lower production and poor chemical results.

Sunoco posted operating earnings of $87 million, or $1.07 per share, compared with the $104 million, or $1.20 per share earned in the year-earlier period.

During the quarter, Sunoco bought back almost 3 per cent or $81 million of its own stock. Including special items, net income for the second quarter was $92 million compared with a net loss of $25 million in the year-ago period.

Analysts polled by Thomson Financial/First Call expected Sunoco to earn between 92 cents and $1.02 per share, with the consensus at $1.03. Late last month, Sunoco said it expected to earn between 90 cents and $1.10 per diluted share.

Amerada Hess Corp, integrated oil and gas independent, said third-quarter earnings fell 35 per cent, as weaker oil and natural gas prices and lower product margins were only partially offset by strong marketing profits.

Hess, which bid $2.7 billion to buy exploration and production company Triton Energy Ltd. earlier this year, earned $167 million, or $1.86 per share, compared with $257 million or $2.86 per share earned in last year's third quarter.

Analysts polled by Thomson Financial/First Call expected Hess to earn between $2.00 and $2.88 per share, with a consensus of $2.31.

Schlumberger Ltd., the world's No. 2 oilfield services company, said third-quarter earnings fell slightly against a backdrop of weakening oil and natural gas prices. Net income fell to $195 million, or 34 cents per share, from $205 million, or 35 cents per share.

Schlumberger Chairman and chief executive Euan Baird said that following the attacks on the World Trade Center and the Pentagon on September 11, most observers have significantly lowered their predictions of oil and gas demand for 2002.