Oil prices propel Exxon's earnings
By Chris Kahn |
April 30, 2010, Friday
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EXXON Mobil Corp yesterday said its quarterly profit jumped 38 percent as oil prices rose in the first three months of this year.
That marks the first year-on-year increase in profit for Exxon since it posted an all-time record of US$14.83 billion in the third quarter of 2008.
Still, earnings remain significantly below that level. During the first three months of this year, the Irving, Texas, oil giant had a profit of US$6.3 billion, or US$1.33 per share. That compares with US$4.55 billion, or 92 cents per share, in the same period last year. Two years ago, Exxon earned US$10.89 billion in the first quarter.
Revenue jumped 41 percent to US$90.25 billion. Analysts had expected earnings of US$1.41 a share on revenue of US$96.41 billion.
Exxon's profit relied heavily on its exploration and production of oil and gas. Oil prices surged over the past 12 months, jumping from a low of US$33 a barrel in the first quarter of 2009 to more than US$80 a barrel this year. The company responded to the rise in price by pumping more from the ground.
Output of oil and natural gas rose 4.5 percent from the first quarter of 2009. New operations in Qatar came online, helping to boost profit even though natural gas prices had fallen from a year ago.
Exxon's refineries struggled, however, especially those located in the United States. American petroleum consumption dropped in the first quarter, and refineries had trouble passing the higher oil costs along to consumers.
The company's US downstream operation, which includes refineries, lost US$60 million in the first quarter, compared with a profit of US$352 million in the year-ago period.
Meanwhile, Exxon's chemicals business more than tripled its profits in the quarter to US$1.25 billion. Exxon said it benefited from stronger profit margins and higher sales volumes. The company also said corporate and financing expenses nearly doubled to US$800 million, primarily because of new health care benefits now required in the US.
During the quarter, Exxon grew its business, raising capital and exploration spending 19 percent annually to US$6.9 billion. Exxon plans to acquire natural gas producer XTO by the end of the second quarter.
That marks the first year-on-year increase in profit for Exxon since it posted an all-time record of US$14.83 billion in the third quarter of 2008.
Still, earnings remain significantly below that level. During the first three months of this year, the Irving, Texas, oil giant had a profit of US$6.3 billion, or US$1.33 per share. That compares with US$4.55 billion, or 92 cents per share, in the same period last year. Two years ago, Exxon earned US$10.89 billion in the first quarter.
Revenue jumped 41 percent to US$90.25 billion. Analysts had expected earnings of US$1.41 a share on revenue of US$96.41 billion.
Exxon's profit relied heavily on its exploration and production of oil and gas. Oil prices surged over the past 12 months, jumping from a low of US$33 a barrel in the first quarter of 2009 to more than US$80 a barrel this year. The company responded to the rise in price by pumping more from the ground.
Output of oil and natural gas rose 4.5 percent from the first quarter of 2009. New operations in Qatar came online, helping to boost profit even though natural gas prices had fallen from a year ago.
Exxon's refineries struggled, however, especially those located in the United States. American petroleum consumption dropped in the first quarter, and refineries had trouble passing the higher oil costs along to consumers.
The company's US downstream operation, which includes refineries, lost US$60 million in the first quarter, compared with a profit of US$352 million in the year-ago period.
Meanwhile, Exxon's chemicals business more than tripled its profits in the quarter to US$1.25 billion. Exxon said it benefited from stronger profit margins and higher sales volumes. The company also said corporate and financing expenses nearly doubled to US$800 million, primarily because of new health care benefits now required in the US.
During the quarter, Exxon grew its business, raising capital and exploration spending 19 percent annually to US$6.9 billion. Exxon plans to acquire natural gas producer XTO by the end of the second quarter.
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