Reuters Business Channel | Reuters.com
Reuters Business Channel | Reuters.com
Exxon Mobil profit up on high oil prices
By Deepa Babington
NEW YORK (Reuters) - Exxon Mobil Corp. (XOM.N: Quote, Profile, Research), the world's largest publicly traded oil company, posted a 32 percent jump in quarterly profit on Thursday, as a relentless surge in crude oil prices and higher refining margins helped offset a hit from lower production.
Oil and gas output fell 4 percent in the second quarter, fueling Wall Street concerns that large oil companies are finding it increasingly difficult to expand production.
"If I can see anything soft in their armor, it's growing production," said Oppenheimer & Co. analyst Fadel Gheit. "We know that this is the most efficient oil company. But maintaining production, let alone increasing it, is a major challenge."
Exxon shares eased 20 cents, or less than 1 percent, at $59.40 on the New York Stock Exchange on Wednesday.
The extended bullish run in oil and gas prices, coupled with persistently strong refining and marketing margins, came to Exxon's aid, allowing the company to post the best second quarter profit in its history.
Net income totaled $7.64 billion, or $1.20 a share in the second quarter, compared with $5.79 billion, or 88 cents a share, in the year-earlier quarter.
Excluding a $200 million charge for a lawsuit provision, the company earned $1.23 a share. That was roughly in line with analysts' forecasts. Those polled by Reuters Estimates expected an average profit of $1.22 per share while the consensus estimate compiled by Thomson First Call was $1.24 a share.
The Irving, Texas company, which has maintained a large stock buyback program as its cash pile soars alongside oil prices, said it would further increase its share repurchase level to $5 billion in the third quarter.
"Fans of huge share buybacks will cheer today's announcement, those looking for progress on production growth will be less happy," Credit Suisse First Boston analysts said in a research note.
Exxon's total revenue jumped to $88.57 billion from $70.69 billion in the year-earlier quarter.
Boosted by investment at its exploration and production operations, capital spending in the quarter grew to $4.54 billion from $3.62 billion a year earlier.
PRODUCTION BLUES
Maturing oilfields and maintenance activities were largely to blame for the 4.3 percent fall in oil and gas production, offsetting a rise in crude production in West Africa and higher gas volumes in Qatar. Excluding divestments and entitlement effects, production fell by 2 percent.
Earlier on Thursday, another top oil company, Royal Dutch Shell Plc. (RDSa.L: Quote, Profile, Research), reported a 22 percent jump in quarterly profit as it, too, enjoyed the windfall from record oil prices. But its results fell short of forecasts and it disclosed a delay in starting production at a key Nigerian oil field, sending its shares down.
Exxon has previously suggested that production volumes will start improving in the second half of the year. Last month, Exxon Chief Executive Lee Raymond told the Reuters Energy Summit that production in the second quarter would not be significantly different from the first, when output fell 5 percent.
But large projects coming on line later this year will drive strong production in the second half, he said.
Scant prospects for boosting production long-term have been among the chief concerns swirling around major oil companies, which face declining production in regions like the U.S. Gulf of Mexico and limited access to regions boasting vast reserves like the Middle East and Russia.
Exxon Mobil profit up on high oil prices
By Deepa Babington
NEW YORK (Reuters) - Exxon Mobil Corp. (XOM.N: Quote, Profile, Research), the world's largest publicly traded oil company, posted a 32 percent jump in quarterly profit on Thursday, as a relentless surge in crude oil prices and higher refining margins helped offset a hit from lower production.
Oil and gas output fell 4 percent in the second quarter, fueling Wall Street concerns that large oil companies are finding it increasingly difficult to expand production.
"If I can see anything soft in their armor, it's growing production," said Oppenheimer & Co. analyst Fadel Gheit. "We know that this is the most efficient oil company. But maintaining production, let alone increasing it, is a major challenge."
Exxon shares eased 20 cents, or less than 1 percent, at $59.40 on the New York Stock Exchange on Wednesday.
The extended bullish run in oil and gas prices, coupled with persistently strong refining and marketing margins, came to Exxon's aid, allowing the company to post the best second quarter profit in its history.
Net income totaled $7.64 billion, or $1.20 a share in the second quarter, compared with $5.79 billion, or 88 cents a share, in the year-earlier quarter.
Excluding a $200 million charge for a lawsuit provision, the company earned $1.23 a share. That was roughly in line with analysts' forecasts. Those polled by Reuters Estimates expected an average profit of $1.22 per share while the consensus estimate compiled by Thomson First Call was $1.24 a share.
The Irving, Texas company, which has maintained a large stock buyback program as its cash pile soars alongside oil prices, said it would further increase its share repurchase level to $5 billion in the third quarter.
"Fans of huge share buybacks will cheer today's announcement, those looking for progress on production growth will be less happy," Credit Suisse First Boston analysts said in a research note.
Exxon's total revenue jumped to $88.57 billion from $70.69 billion in the year-earlier quarter.
Boosted by investment at its exploration and production operations, capital spending in the quarter grew to $4.54 billion from $3.62 billion a year earlier.
PRODUCTION BLUES
Maturing oilfields and maintenance activities were largely to blame for the 4.3 percent fall in oil and gas production, offsetting a rise in crude production in West Africa and higher gas volumes in Qatar. Excluding divestments and entitlement effects, production fell by 2 percent.
Earlier on Thursday, another top oil company, Royal Dutch Shell Plc. (RDSa.L: Quote, Profile, Research), reported a 22 percent jump in quarterly profit as it, too, enjoyed the windfall from record oil prices. But its results fell short of forecasts and it disclosed a delay in starting production at a key Nigerian oil field, sending its shares down.
Exxon has previously suggested that production volumes will start improving in the second half of the year. Last month, Exxon Chief Executive Lee Raymond told the Reuters Energy Summit that production in the second quarter would not be significantly different from the first, when output fell 5 percent.
But large projects coming on line later this year will drive strong production in the second half, he said.
Scant prospects for boosting production long-term have been among the chief concerns swirling around major oil companies, which face declining production in regions like the U.S. Gulf of Mexico and limited access to regions boasting vast reserves like the Middle East and Russia.
posted by Marcel at 2:00 PM
0 Comments:
Post a Comment
<< Home