HOUSTON -- ConocoPhillips has reported second-quarter net income of $5.439 billion, or $3.50 per share. This compared with $301 million, or 18 cents per share, for the same quarter in 2007, which included a $4.512-billion impairment associated with the company's Venezuelan operations. Second-quarter 2007 earnings adjusted for the Venezuela impairment were $4.813 billion, or $2.90 per share. Revenues were $71.4 billion, versus $47.4 billion a year ago.
Exploration and production (E&P) second-quarter net income was $3.999 billion, compared with net income of $2.887 billion in the previous [image-nocss] quarter and a net loss of $2.404 billion in second-quarter 2007. Second-quarter 2007 earnings adjusted for the Venezuela impairment were $2.108 billion.
Refining and marketing R&M net income was $664 million in the second quarter, up from $520 million in the previous quarter and down from $2.358 billion in second-quarter 2007. The increase in net income from the previous quarter was primarily due to higher worldwide realized refining margins and improved refining operations in the U.S. Gulf Coast and the United Kingdom.
Although global refining margins improved by nearly 50% versus the previous quarter, the company's realized refining margins increased by 24%. The lower market capture was primarily due to secondary product prices, which have not kept pace with crude oil prices. Secondary products, such as fuel oil, natural gas liquids, and petroleum coke, comprised approximately 20% of ConocoPhillips' overall refined product output during the quarter. In addition, international realized refining margins were impacted in the second quarter by a temporary inventory build. The improvement in global realized margins was partially offset by a lower net benefit from asset rationalization efforts, as well as higher turnaround and utility costs. The decrease in net income from second-quarter 2007 was primarily due to significantly lower U.S. refining and marketing margins, a lower net benefit from the company's asset rationalization efforts and higher turnaround and utility costs.
The domestic refining crude oil capacity utilization rate for the second quarter was 94%, a 4% increase from the previous quarter. The increase was primarily due to improved refining operations in the U.S. Gulf Coast. The international crude oil capacity utilization rate was 88%, up from 86% in the previous quarter.
Worldwide, R&M's refining crude oil capacity utilization rate was 93%, up from 89% the previous quarter and the same as the second quarter of 2007. Before-tax turnaround costs were $170 million in second-quarter 2008, up from $90 million in the previous quarter and $58 million in second-quarter 2007.
R&M net income for the first six months of 2008 was $1.184 billion, down from $3.494 billion in 2007. The decrease was primarily due to significantly lower U.S. refining and marketing margins, as well as a reduced net benefit from the company's asset rationalization efforts and higher turnaround and utility costs.
ConocoPhillips is an international, integrated energy company with interests around the world. Headquartered in Houston, the company had approximately 33,100 employees, $190 billion of assets, and $253 billion of annualized revenues as of June 30, 2008.
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