IRVING, Texas (AP) - Exxon
Mobil Corp., the world's largest publicly traded oil company, reported a
32 percent increase in second-quarter profits as it reaped the benefits of soaring
oil and natural gas prices.
Net income for the April-June quarter rose to $7.64 billion, or $1.20 per share,
from $5.79 billion, or 88 cents per share, the year before. Excluding one-time
items, earnings totaled $7.84 billion, or $1.23 per share, Exxon said on Thursday.
The adjusted earnings just missed analysts' expectations for profit of $1.24
per share, according to a Thomson Financial survey.
Revenue totaled $88.57 billion, a gain of 25 percent from $70.69 billion a
Profits from exploration and production jumped $1 billion to $4.9 billion,
a reflection of strong crude and natural gas prices offsetting a 4.3 percent
reduction in output, the company said.
Fadel Gheit, an analyst with Oppenheimer & Co., said Exxon's profits from
that segment stood out. But Gheit thought the figures should have been higher
than the first quarter's $5 billion, perhaps by as much as $500 million.
"It leads me to believe costs must be rising, which I have no argument
with," he said. "The underlying cost structure for Exxon and the industry
is definitely rising -- and it could be rising pretty fast. They can do what
ever they want, but at the end of the day, the industry will dictate the environment."
Earnings from refining and selling petroleum products rose $714 million to
$2.2 billion, while earnings from its chemicals business were $814 million,
up $207 million from a year earlier.
"We had a very strong second quarter in all segments of our business,"
said Henry Hubble, Exxon's vice president of investor relations. "Our continued
focus on operational and executional excellence underpins these results."
The company said its capital and exploration spending rose from $3.6 billion
to $4.5 billion.
"Exxon Mobil-operated projects that are key to the future volume growth
continue to be on budget and on or ahead of schedule," said Exxon Mobil
chairman and chief executive Lee R. Raymond.
The strong second quarter enabled Exxon Mobil to produce a record $15.5 billion
in net income, or $2.42 per share, for the first six months. That 38 percent
boost is up $4.2 billion, or $1.71 a share, from the first six months of 2004.
Not only has it surpassed last year's two-quarter mark. Exxon is just $1.5
billion off its three-quarter performance from last year. If Exxon continues
at this pace, it could record more than $30 billion in net income; last year
it netted $25.3 billion.
Revenue for the first half reached $170 billion, which is up from $138 billion
after six months last year.
"They made a lot of money last year, but now they are printing it,"
So far in the first half, exploration and production net income rose $2.1 billion
to $9.9 billion, and earnings from refining and petroleum sales rose $853 million
to $3.3 billion, the product of stronger worldwide margins, the company said.
Chemical earnings of $2 billion were up $925 million form the first half of
Shares of Exxon fell 9 cents to $59.50 in early afternoon trading. The stock
has been trading in a 52-week range of $44.20 to $64.37.