- The Washington Times - Thursday, July 27, 2006

DALLAS (AP) — Soaring energy prices catapulted Exxon Mobil, the world’s largest publicly traded oil company, to a second-quarter profit of more than $10 billion, and they are likely to spur industrywide growth — and public outrage — all year.

Royal Dutch Shell came close to matching Exxon Mobil Corp.’s 36 percent quarterly earnings boost yesterday, posting net income of $7.3 billion, an increase of 40 percent from the previous year.

The oil and gas industry’s prolific profits come as motorists in the United States pay an average of $3 a gallon at the pump and as Washington lawmakers consider opening to drilling areas of the Gulf of Mexico currently off limits — both of which have generated political backlash.

Rep. Edward J. Markey, Massachusetts Democrat, said yesterday that American consumers have been “tipped upside down and have [had] their savings shaken out of their pockets at the gas pump.”

Around the globe, energy-intensive businesses such as shippers and chemical manufacturers are feeling the pinch of higher prices, while oil-exporting nations in the Middle East and beyond are experiencing rapid economic growth.

Crude-oil prices are hovering near $75 a barrel, and analysts do not foresee a sharp drop anytime soon given the world’s rising call for fuel and the supply threats that instill fear in the market.

“We continue to see demand growth year over year,” Henry Hubble, Exxon’s vice president of investor relations, told analysts. “We’re selling everything we can make.”

Other oil companies reported big numbers for the quarter this week as well. BP PLC reported its quarterly profit rose 30 percent to $7.3 billion, and ConocoPhillips said its earnings rose 65 percent to $5.18 billion. Chevron Corp. will round out the field of five majors when it reports its second-quarter performance today.

These five were expected to earn an estimated $33.6 billion, or a 32 percent boost, according to analysts surveyed by Thomson Financial. Already the first four have reported earning $30.16 billion.

If prices stay at these levels, look for more record-breaking profits soon, said Fadel Gheit, analyst for Oppenheimer & Co.

“The rising tide lifts all boats,” Mr. Gheit said. “Unless there is a price collapse of oil, you will see the second half of the year best its first half.”

Exxon Mobil said earnings amounted to $1.72 per share in the April-June quarter compared with a profit of $7.64 billion, or $1.20 per share, a year ago.

The results topped Wall Street expectations but came in behind Exxon Mobil’s record profit of $10.71 billion set in the fourth quarter of 2005. Analysts polled by Thomson Financial expected the company to earn $1.64 per share.

Revenue rose to $99.03 billion from $88.57 billion in the prior-year quarter. That was short of Exxon Mobil’s record third-quarter revenue of $100.72 billion — which also stands as record revenue generated by any U.S. public company in a quarter.

Its shares fell 13 cents to close at $66.47 on the New York Stock Exchange after reaching a high of $67.65 earlier in the session.

Exxon Mobil said it spent $4.9 billion on capital and exploration projects during the quarter, up 8 percent from a year ago, while distributing $7.9 billion to shareholders in the form of dividends and share repurchases.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide