Big oil pwnez you!
Exxon profit tops $10 billion, capping record year
Mon Jan 30, 2006 11:34 AM ET
Deepa Babington
NEW YORK (Reuters) - Exxon Mobil Corp. <XOM.N>, the world's largest publicly traded oil company, on Monday reported a quarterly profit of $10.7 billion, capping a year of record earnings dominated by surging oil and gas prices.
The results pushed up Exxon's profit for the year to a staggering $36.13 billion -- bigger than the economies of 125 of the 184 countries ranked by the World Bank. Profit rose 42 percent from 2004.
The company and its peers have come under fire for posting billions in profit while consumers struggle with high gasoline prices. Exxon was quick to emphasize that such results would help it make long-term investments to meet energy demand.
The Irving, Texas company's fourth-quarter net income rose 27 percent, to $10.71 billion, or $1.71 a share, from $8.42 billion, or $1.30 a share, a year earlier. Revenue was just shy of $100 billion.
Excluding a special gain, the company earned $1.65 per share, handily beating the average forecast of $1.45 among analysts polled by Reuters Estimates.
"It's an exceptionally strong quarter -- they're the world's most profitable company," said Robert Lutts, president of Cabot Money Management. "It could raise eyebrows among some, but they're doing their job."
Exxon shares were up $1.84, or 3 percent, at $63.13 in late-morning trade on the New York Stock Exchange.
OIL'S RECORD RUN
Crude oil prices rose about 40 percent last year, driven up by tensions in oil-producing countries like Iran and Nigeria, hurricanes in the Gulf of Mexico and tight supplies. They have been rise for four years, handing Big Oil a profit bonanza.
Natural gas prices have been on a similar tear, nearly doubling last year on the futures market thanks to supply disruptions and higher demand.
Earnings at Exxon's exploration and production division rose 44 percent to $7.04 billion. Refining and marketing operations posted a marginal rise in profit as the impact of the hurricanes offset a boost from higher refining and marketing margins.
Still, Exxon's results showed evidence of some of the problems affecting large oil companies, which are struggling to raise output as they grapple with maturing fields and find it harder to access vast reserves in regions like the Middle East and Russia.
Exxon said oil and gas production fell 1 percent in the quarter. However, excluding the lingering effects of Hurricanes Katrina and Rita, which slammed into the U.S. Gulf Coast last year, as well as divestment and entitlement effects, production rose 2 percent.
Analysts expect the company to report higher production this year as new projects in Russia and Africa ramp up.
"Progress on tangible growth in oil and gas production has so far been slow and, combined with the inertia associated with its sheer scale, has led the shares to lag the performance of the smaller names," Citigroup said in a research note.
Exxon used a large chunk of its growing cash pile to buy back shares -- $5 billion in the fourth quarter, the same as in the third quarter. Also, it hiked its quarterly dividend last week.
Exxon profit tops $10 billion, capping record year
Mon Jan 30, 2006 11:34 AM ET
Deepa Babington
NEW YORK (Reuters) - Exxon Mobil Corp. <XOM.N>, the world's largest publicly traded oil company, on Monday reported a quarterly profit of $10.7 billion, capping a year of record earnings dominated by surging oil and gas prices.
The results pushed up Exxon's profit for the year to a staggering $36.13 billion -- bigger than the economies of 125 of the 184 countries ranked by the World Bank. Profit rose 42 percent from 2004.
The company and its peers have come under fire for posting billions in profit while consumers struggle with high gasoline prices. Exxon was quick to emphasize that such results would help it make long-term investments to meet energy demand.
The Irving, Texas company's fourth-quarter net income rose 27 percent, to $10.71 billion, or $1.71 a share, from $8.42 billion, or $1.30 a share, a year earlier. Revenue was just shy of $100 billion.
Excluding a special gain, the company earned $1.65 per share, handily beating the average forecast of $1.45 among analysts polled by Reuters Estimates.
"It's an exceptionally strong quarter -- they're the world's most profitable company," said Robert Lutts, president of Cabot Money Management. "It could raise eyebrows among some, but they're doing their job."
Exxon shares were up $1.84, or 3 percent, at $63.13 in late-morning trade on the New York Stock Exchange.
OIL'S RECORD RUN
Crude oil prices rose about 40 percent last year, driven up by tensions in oil-producing countries like Iran and Nigeria, hurricanes in the Gulf of Mexico and tight supplies. They have been rise for four years, handing Big Oil a profit bonanza.
Natural gas prices have been on a similar tear, nearly doubling last year on the futures market thanks to supply disruptions and higher demand.
Earnings at Exxon's exploration and production division rose 44 percent to $7.04 billion. Refining and marketing operations posted a marginal rise in profit as the impact of the hurricanes offset a boost from higher refining and marketing margins.
Still, Exxon's results showed evidence of some of the problems affecting large oil companies, which are struggling to raise output as they grapple with maturing fields and find it harder to access vast reserves in regions like the Middle East and Russia.
Exxon said oil and gas production fell 1 percent in the quarter. However, excluding the lingering effects of Hurricanes Katrina and Rita, which slammed into the U.S. Gulf Coast last year, as well as divestment and entitlement effects, production rose 2 percent.
Analysts expect the company to report higher production this year as new projects in Russia and Africa ramp up.
"Progress on tangible growth in oil and gas production has so far been slow and, combined with the inertia associated with its sheer scale, has led the shares to lag the performance of the smaller names," Citigroup said in a research note.
Exxon used a large chunk of its growing cash pile to buy back shares -- $5 billion in the fourth quarter, the same as in the third quarter. Also, it hiked its quarterly dividend last week.
