NEW YORK -- Exxon Mobil Corp. on Thursday posted a quarterly profit of $9.9 billion, the largest in U.S. corporate history, as it raked in a bonanza from record oil and gas prices, according to Reuters.
While profit was up 75% and revenue rose 32% to more than $100 billion, the results fell short of Wall Street forecasts due to production outages caused by Hurricanes Katrina and Rita and sharply lower profit at the company's chemicals division.
Analysts have warned that record profits for Big Oil, at a time when consumers [image-nocss] are paying sky-high prices for gasoline, could add to calls for a windfall profits tax or other penalties on oil companies.
Third-quarter net income at Exxon, the world's largest publicly traded oil company, rose to $9.92 billion, or $1.58 a share, from $5.68 billion, or 88 cents a share, a year earlier. Excluding a gain of $1.62 billion from restructuring its stake in a Dutch gas transportation business, earnings were $1.32 per share. On that basis, analysts' average forecast was $1.39, according to Reuters Estimates.
"They were a bit disappointing, but this a temporary phenomenon," said Paul Kuklinski, an analyst with Boston Energy Research/Soleil Securities. "This is largely attributable to hurricane effects."
Oil and gas companies have been enjoying an unusually rosy environment for months. In the third quarter, they were helped by Katrina and Rita, which ripped through the Gulf of Mexico, disrupting energy operations in the region and sending oil prices and refining margins sharply higher.
In addition to calls for a windfall profits tax or other penalties, lawmakers and consumer advocates have been urging oil companies to expand refining capacity and take other steps to help bring down gasoline prices. "We're already seeing some companies yielding to pressure," said Oppenheimer & Co. analyst Fadel Gheit. "But everybody is waiting for the big lady to sing, which is Exxon."
Exxon's oil and gas production fell 4.7% in the third quarter from a year earlier as outages caused by Katrina and Rita, maintenance activities and maturing fields more than offset higher production from new fields in West Africa. Excluding the impact of the hurricanes, divestments and entitlement effects, output fell 1%.
Still, record crude oil prices -- which touched $70 a barrel in the quarter -- pushed earnings at its exploration and production unit to $5.73 billion, up $1.8 billion from a year earlier. At its refining and marketing operations, profit rose to $2.13 billion, up $727 million from a year earlier. Stronger refining margins outweighed weak marketing margins and lower petroleum product sales.
Earnings at its chemicals division tumbled to $472 million, down $537 million from a year earlier, due to higher feedstock costs and lower margins. ExxonMobil's capital expenditures jumped to $4.41 billion from $3.63 billion a year earlier.
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