Russia's largest private oil firm Lukoil (Other OTC: LUKOF - news) said Monday its profits dropped 61 percent in the third quarter compared with a year earlier due to the slide in oil prices.

The company reported its net income was $623 million in the July-September period. Analysts interviewed by Interfax news agency had estimated net profits at $795 million.

Lukoil's revenues slightly exceeded analysts' expectations, even though they dropped 39 percent to $23.4 billion in the third quarter compared with the same period last year.

The company said its financial results had been affected by crude oil prices that "dropped nearly two-fold" and accounting costs related to asset sales and project terminations.

Lukoil -- which has massively invested to reverse a decline in its output -- said its production had increased by 1.1 percent to an average of 2.3 million barrels a day.

The company has benefitted from commercial production at the West Qurna-2 field in Iraq, which produced some 235,000 barrels a day in the third quarter.

Its domestic oil production meanwhile dropped two percent to 1.73 million barrels a day.