- The Washington Times - Thursday, February 1, 2007

HOUSTON (AP) — Oil giant Exxon Mobil topped its own record for the biggest annual profit by a U.S. company last year, racking up earnings that amounted to $4.5 million an hour for the world’s largest publicly traded oil company.

It reported income of $39.5 billion despite a 4 percent drop in earnings in the final three months of 2006, as prices for oil and natural gas fell from extraordinary levels earlier in the year.

Lower commodity prices may linger for at least the first part of 2007, even as the cost of doing business rises because of factors such as a shortage of drilling equipment and labor.

So while big players such as Exxon Mobil Corp., Chevron Corp. and ConocoPhillips — first, second and third, respectively, among integrated U.S. oil companies — are expected to continue to rake in piles of cash, the totals aren’t likely to be the amounts of recent quarters.

“I’d say overall, if you look for earnings to decline 5 to 15 percent from the huge highs this past year, you’re probably going to see most of these companies fall within that range,” said John Parry, a senior analyst at energy consulting firm John S. Herold Inc.

Exxon Mobil’s profits didn’t go unnoticed on Capitol Hill, where one lawmaker called them “outlandish” and said oil companies have benefited too long from a Republican-backed energy policy that cheats American taxpayers.

Exxon Mobil wasn’t alone among oil and gas entities posting a huge profit in 2006. Yesterday, three other companies — Royal Dutch Shell PLC, Marathon Oil Corp. and Valero Energy Corp. — also reported best-ever full-year profits. The four companies combined had earnings of $75.6 billion last year.

Last week, Houston-based ConocoPhillips said its $15.5 billion profit last year topped its previous record from 2005 by about $2 billion.

Chevron is scheduled to report 2006 results today.

Exxon Mobil’s 2006 profit beat its own previous record for a U.S. company of $36.13 billion set in 2005. Its net income for 2006 equals the approximate gross domestic product — a measure of all goods and services produced within a country in a given year — of countries such as Ecuador, Luxembourg and Croatia.

Also notable was Exxon Mobil’s revenue, which rose to $377.64 billion for the year, surpassing the record $370.68 billion it posted in 2005.

Exxon Mobil’s record earnings followed a year of extraordinarily high energy prices as crude oil topped $78 a barrel in the summer — driving up average gasoline prices in the United States to more than $3 a gallon. Prices retreated later in the year as crude oil supplies grew and concerns over Middle East tensions eased, among other factors.

The fourth-quarter decline reflects lower profits from Exxon Mobil’s refining and marketing operations and a sharp drop-off in natural-gas prices.

The results for the October-December period mimicked those of ConocoPhillips, which last week said its fourth-quarter profit fell 13 percent — also primarily because of lower natural-gas prices and refining margins. Analysts largely have predicted declines in fourth-quarter earnings for the big U.S. oil companies because of the moderation in commodity prices.

At Exxon Mobil, profit for the fourth quarter of 2006 declined to $10.25 billion from the $10.71 billion Exxon earned in the 2005 quarter, a record quarterly profit for any U.S. public company. That best-ever showing came when the price of both natural gas and crude oil skyrocketed in the wake of Hurricanes Katrina and Rita, which damaged wells, pipelines and refineries in the key energy producing Gulf of Mexico.

The most recent result marked the first time since the third quarter of 2002 Exxon Mobil had a year-over-year quarterly earnings decline.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide