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Exxon Made $3.4 Billion, But It Isn't Enough

Exxon Mobil Corp.'s problem isn't that it missed earnings forecasts (though, even with a profit of $3.4 billion, it did). And its problem isn't that it missed production forecasts (which also happened). It isn't even that its U.S. upstream business clocked its tenth quarterly loss in a row (actually, that one is a problem, but not the main one).

Exxon's problem is that all this makes it just too expensive.

The only thing that really matters when it comes to the supermajors right now is how much cash they're generating. Exxon noted toward the top of Friday morning's results announcement that cash from operations covered its capital expenditure and dividends -- which is the bare minimum investors want to see with oil still hovering at around $50 a barrel.

But, it should be noted, this is partly because capex has been dialed way back. While many oil and gas producers are tapping the brakes these days, Exxon of course does things a bit bigger. Capex and exploration...