HOUSTON (Reuters) - Exxon Mobil Corp XOM.N on Friday reported a 21% drop in quarterly profit, its third period in a row of weaker year-over-year results, as sharply higher oil production was offset by weaker refining and chemicals business.

FILE PHOTO: Logos of ExxonMobil are seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan April 4, 2017. REUTERS/Toru Hanai/File Photo

Shares slipped 1.6 percent to $71.34 in early trading even though its 73 cents a share profit topped analysts' recently-lowered estimates. Analysts had reduced estimates to 66 cents per share after Exxon last month guided to lower year-over-year profit. Exxon’s weaker earnings mirrored those at rivals Royal Dutch Shell RDSa.L, Equinor EQNR.OL and Total SA TOTF.PA. Shell posted its smallest profit in 30 months on weaker margins in chemicals, a loss in refining and tumbling natural gas prices. Total also cited weaker natural gas and refining operations for earnings that fell 19% from a year ago, while Equinor’s profit fell 27% on weaker oil and gas prices.

A bright spot for Exxon was oil and gas production rising 7% to 3.9 million barrels per day. Output in the top U.S. shale field, the Permian Basin, rose to 274,000 barrels of oil and gas per day, up 90% from a year ago.

“Three of our businesses were at lows in their cycles,” said Neil Chapman, an Exxon senior vice president, adding the company historically invests during downturns for long-term returns.

The largest U.S. oil producer’s net income fell to $3.13 billion, or 73 cents per share, in the second quarter, from $3.95 billion, or 92 cents per share, last year.

“Pretty weak quarter from them once again,” said Jennifer Rowland, analyst with Edward Jones. After capital spending and dividends, Exxon had a free cash flow shortfall of $2.7 billion, similar to last quarter, Rowland added.

Exxon has made “limited progress on asset sales,” though, analysts at Tudor, Pickering, Holt & Co said in a note to clients.

Exxon’s Chapman said the company remains committed to selling $15 billion worth of assets through 2021.

The sales are needed to finance shareholder returns and major projects, but Exxon reported just $33 million in asset sales for the period, the lowest in at least 12 quarters. That follows proceeds from sales of $107 million in the first quarter.

Exxon’s chemicals business fell to a loss in the United States for the first time in at least three years.

Lower margins and downtime drove refining profits down 88 percent over last year.

Exxon had been investing in major projects to boost production at a time when investors have been pressing oil companies to cut back on spending and increase returns to shareholders. The company said it has its best portfolio since the merger of Exxon and Mobil and does not “have to do anything” in terms of adding assets, Chapman said.

But in the Permian Basin, where the company holds 1.6 million acres and plans to use its size and scale as a competitive advantage, Chapman said it remains, “eyes wide open” about mergers and acquisitions.

Exxon boosted its estimated recoverable reserves in its offshore Guyana project to more than 6 billion barrels of oil equivalent, from 5.5 billion barrels.