HOUSTON -- ConocoPhillips has reported first-quarter net income of $4.139 billion, or $2.62 per share. This compared with $3.546 billion, or $2.12 per share, for the same quarter in 2007. Revenues were $54.9 billion, versus $41.3 billion a year ago.
"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," said Jim Mulva, chairman and CEO. "Our upstream business…benefited from higher commodity prices. In the downstream business, our worldwide refining crude oil capacity utilization rate was 89%, and we were [image-nocss] impacted by significantly lower realized margins."
During the quarter, the company generated $6.6 billion of cash from operations and $400 million in proceeds from asset dispositions.
Exploration and production (E&P) first-quarter net income was $2.887 billion, up from $2.608 billion in the previous quarter and $2.329 billion in first-quarter 2007. The increase from fourth-quarter 2007 was primarily due to higher commodity prices, partially offset by reduced volumes and other factors. The increase from first-quarter 2007 was primarily due to higher commodity prices, partially offset by higher taxes, lower volumes, a reduced net benefit from asset rationalization efforts and increased operating costs.
The midstream segment had first-quarter net income of $137 million, down from $162 million in the previous quarter and up from $85 million in first-quarter 2007.
Refining and marketing (R&M) net income was $520 million in the first quarter, down from $1,122 million in the previous quarter and $1.136 billion in first-quarter 2007. Results for the first quarter were lower primarily due to the absence of inventory benefits realized in fourth-quarter 2007. Despite a modest increase in the global market crack from the previous quarter, realized refining margins were also lower due to the adverse impact of certain domestic regional gasoline and distillate differentials, as well as secondary product prices, mainly for natural gas liquids and fuel oil. In addition, earnings were less than the previous quarter due to lower volumes, which included a decrease in ConocoPhillips' ownership interest in the Borger, Texas, refinery to 65% in 2008 from 85% in 2007.
The decrease in net income from first-quarter of 2007 was primarily due to lower U.S. refining market cracks and lower volumes. Refining volumes decreased due to unplanned downtime at the company's U.S. Gulf Coast refineries and the ownership interest change in Borger, while international marketing sales declined as a result of 2007 asset dispositions. These decreases were partially offset by higher realized international refining cracks.
The domestic refining crude oil capacity utilization rate for the first quarter was 90%, a 6% decrease from the previous quarter. Refining volumes decreased due to higher planned maintenance at the company's refineries in the East and Central regions of the United States, as well as the unplanned downtime at the Gulf Coast refineries.
Mulva concluded: "Downstream, while margins are anticipated to improve, we expect continued negative pressure from crude costs relative to secondary product prices. As a result of planned maintenance during the quarter at several facilities and the potential for ongoing weak hydro-skimming margins at our Wilhelmshaven refinery, we anticipate the worldwide refining crude oil capacity utilization rate to be in the lower-90% range during the second quarter. Turnaround costs are expected to be approximately $175 million before-tax for the quarter."
Houston-based ConocoPhillips is an international, integrated energy company with $183 billion in assets and $220 billion of annualized revenues as of March 31, 2008.
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