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Exxon Mobil Profit, Sales Soar to Records: msg#00504
culture.discuss.cia-drugs
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Subject: |
Exxon Mobil Profit, Sales Soar to Records |
the higher prices go, the more demand there is for the
PETRODOLLAR. Ironic, isnt it? -vmann
"Exxon is a good corporate citizen but it does not work for the
welfare of the country," said oil analyst Fadel Gheit at Oppenheimer
& Co. in New York.
http://apnews.myway.com/article/20051027/D8DGL2502.html
Exxon Mobil Profit, Sales Soar to Records
Oct 27, 6:13 PM (ET)
By STEVE QUINN
DALLAS (AP) - Exxon Mobil Corp. (XOM) rewrote the corporate record
books Thursday as the oil company's third-quarter earnings soared to
almost $10 billion and it became the first public company ever with
quarterly sales topping $100 billion. Anglo-Dutch competitor Royal
Dutch Shell PLC (RDSA) wasn't far behind, posting a profit of $9
billion for the quarter.
Those results led Democrats in Congress to demand a new windfall
profits tax. "Big oil behemoths are making out like bandits, while the
average American family is getting killed by high gas prices, and
soon-to-be record heating oil prices," Sen. Chuck Schumer, D-N.Y., said
in a statement.
But Energy Secretary Samuel Bodman said President Bush opposes such a
move and is instead considering a wide range of proposals to help
cushion consumers, including the creation of an emergency reserve of
gasoline and other refined products.
Thursday's outsized earnings are a result of surging oil and natural
gas prices that pushed pump prices to record territory after Hurricane
Katrina. They come on the heels of similar eye-popping gains reported
this week by BP PLC (BP), ConocoPhillips Inc. and Marathon Oil Corp.
(MRO) Chevron Corp. (CVX) reports its earnings on Friday.
Some Republican members of Congress called on the industry to invest in
ways that will increase production so that consumers get a break at the
pumps or when they pay their heating bills. But analysts said telling
the industry how to spend its money was unfair, if not futile.
"Exxon is a good corporate citizen but it does not work for the welfare
of the country," said oil analyst Fadel Gheit at Oppenheimer & Co.
in New York.
Exxon Chairman and Chief Executive Lee R. Raymond did not mention of
the record results in the company's earnings release. Instead, he noted
that the world's largest publicly traded oil company "acted responsibly
in pricing at our company operated service stations, and we also
encouraged our independent retailers and distributors to do the same."
Henry Hubble, Exxon's vice president of investor relations, did note on
a conference call the company's record profit, which rose 75 percent in
the quarter to $9.92 billion from $5.68 billion a year ago. He said the
gains "reflect the strong commodity prices and our fundamental business
model that is disciplined, straightforward and focused on generating
value while managing risk."
The previous oil-industry earnings record was Exxon's 2004
fourth-quarter profit of $8.42 billion. Third-quarter revenue jumped to
$100.72 billion from $76.38 billion in the prior-year period.
To put its performance into perspective, Exxon's revenue for the
three-month period was greater than the annual gross domestic product
of some of the largest oil producing nations, including the United Arab
Emirates and Kuwait - even though it lost considerable production
because of a string of hurricanes that battered the U.S. Gulf coast.
Robert Kaufmann, a professor at Boston University's Center for Energy
and Environmental Studies, says production will return to pre-hurricane
levels and hurricane-related losses will disappear in future earnings
reports, but profits will remain high.
"A lot of the capacity was being built when oil was trading at $20 to
$30 a barrel range, so by definition those fields are much more
profitable," he said. "Nobody should be surprised by this."
Despite the profit surge, Exxon's performance fell short of analysts'
expectations and its shares fell 60 cents to $55.60 in trading Thursday
on the New York Stock Exchange, while U.S.-traded Class A shares of
Shell rose $1.15, or 1.9 percent, to $60.65 on the NYSE.
With oil futures above $60 a barrel for much of the third quarter,
Exxon's profits from petroleum exploration and production increased by
$1.8 billion to $5.7 billion. Soaring prices for gasoline, diesel and
jet fuel lifted refining and marketing profits by $727 million to $2.13
billion.
However, income at the company's chemicals unit declined by $537
million to $472 million, a reflection of the higher prices for raw
materials.
Exxon said hurricanes slashed U.S. production volumes by 5 percent from
a year ago, while global daily production slipped to 2.45 million
barrels of oil equivalent from 2.51 million barrels. By the end of the
year, it will cost the company about $100 million after taxes, the
company estimated.
At Shell, third-quarter net income grew 68 percent to $9.03 billion
from $5.37 billion a year earlier. Revenue at the London-based company,
which has extensive operations in the United States, rose 8 percent to
$76.44 billion.
"We are capturing the benefits of high oil and gas prices and refining
margins," Shell Chief Financial Officer Peter Voser said, referring to
the profit margin on each barrel of crude that is refined into
gasoline, diesel and jet fuel.
Shells profits from exploration and production increased by $2.6
billion to $5 billion in spite of an 11 percent decline in oil and
natural-gas output. Its refining and marketing profit climbed by $201
million to $1.7 billion. Its chemicals business saw profits decline by
$251 million to $321 million.
Shell said hurricane damage would cost it about $350 million, although
much of the expense would be covered by insurance.
Also on Thursday, Marathon said third-quarter profit more than tripled
to $770 million, up from $222 million a year earlier. Most of the
profit came from its oil and natural-gas production unit. However, the
results fell short of Wall Street's aggressive estimates and Marathon's
stock slumped $3.80, or 6.2 percent, to $57.28 on the NYSE.
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