Exxon's Profits Up 10%
First Quarter Best Ever For Oil Giant; Valero Energy's Earnings Surge 35%
By JOHN PORRETTO
Associated Press
April 27 2007
NEW YORK -- Oil giant Exxon Mobil Corp. kicked off 2007 with a 10 percent rise in profits, its best-ever first quarter, as higher margins on refining and chemical operations offset lower prices for crude oil and natural gas.
Exxon Mobil, the world's largest publicly traded oil company, said Thursday it earned $9.3 billion in the January-March period, beating Wall Street expectations, even as revenue slipped and fell well short of analysts' forecasts.
The Irving, Texas-based company was the third major oil company to issue an earnings report in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profits rose 7.7 percent as a result of asset sales that offset lower year-over-year commodity prices.
Also Thursday, Valero Energy Corp., the nation's largest independent oil refiner, said its first-quarter profits jumped 35 percent on the back of stronger gasoline and distillate margins.
The market price for crude oil was off more than $5 a barrel in the first quarter, compared with a year earlier. The comparable price for natural gas also was down.
Still, given the rise in gasoline prices at the pump in recent weeks, oil majors such as Exxon Mobil and BP were getting little sympathy from U.S. consumers for not earning as much as they could have if market prices for their products had been higher to start 2007.
"They're hurting me all the way around," Bill LoGerfo of Staten Island said Thursday as he paid $3.27 a gallon for premium unleaded to fill up his car at a BP station in Manhattan.
"I'm in the construction business, so it makes it more expensive to get materials shipped to me," LoGerfo said. "These prices really trickle down to the little guy."
In response to the new round of oil profits, Sen. Bob Casey, D-Pa., introduced legislation Thursday that he hopes will curtail rising gas prices. Casey's bill would impose a windfall profits tax and close certain tax loopholes for big oil companies and use the money for research into biofuels and other related projects.
Exxon Mobil's profits amounted to $1.62 a share, up from $8.4 billion, or $1.37 a share, a year earlier. Analysts polled by Thomson Financial were looking for a profit of $1.52 a share.
Revenue fell to $87.2 billion from $88.9 billion a year earlier, well below the $100 billion that analysts had forecast.
Last year, the company posted the largest annual profit by a U.S. company - $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion, set in 2005.
Last month, Exxon Mobil said it will spend some of that money on more than 20 new global projects in the next three years, investments expected to add 1 million oil-equivalent barrels a day to its volumes at peak production.
The company said it spent $4.3 billion on capital and exploration projects in the first quarter and plans to spend roughly $20 billion this year on such projects.
"In the first quarter, Exxon Mobil continued to actively invest, bringing additional crude oil, finished products and natural gas to market," Chairman and Chief Executive Rex Tillerson said.
Exxon Mobil said earnings from its exploration and production arm fell to $6.04 billion from $6.38 billion a year earlier, primarily reflecting lower oil and natural gas prices and decreased demand for natural gas in Europe.
The company said oil production in the first three months of 2007 was slightly higher than a year earlier, helped in part by increased production from projects in West Africa, Russia and the Middle East. Natural gas production was off from last year, hampered by mature field declines and lower European demand related to weather.
On the refining and marketing side of the business, Exxon Mobil's earnings rose to $1.9 billion from $1.3 billion to start 2006, lifted by improved margins and more efficient refining operations.
San Antonio-based Valero's profits rose to a first-quarter record $1.14 billion, or $1.86 a share, from $848 million, or $1.32 a share, a year earlier. Analysts forecast $1.81 a share, according to Thomson Financial.
Revenue declined to $19.7 billion from $20.93 billion. Analysts were looking for $22.96 billion.
Copyright 2007 Associated Press
First Quarter Best Ever For Oil Giant; Valero Energy's Earnings Surge 35%
By JOHN PORRETTO
Associated Press
April 27 2007
NEW YORK -- Oil giant Exxon Mobil Corp. kicked off 2007 with a 10 percent rise in profits, its best-ever first quarter, as higher margins on refining and chemical operations offset lower prices for crude oil and natural gas.
Exxon Mobil, the world's largest publicly traded oil company, said Thursday it earned $9.3 billion in the January-March period, beating Wall Street expectations, even as revenue slipped and fell well short of analysts' forecasts.
The Irving, Texas-based company was the third major oil company to issue an earnings report in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profits rose 7.7 percent as a result of asset sales that offset lower year-over-year commodity prices.
Also Thursday, Valero Energy Corp., the nation's largest independent oil refiner, said its first-quarter profits jumped 35 percent on the back of stronger gasoline and distillate margins.
The market price for crude oil was off more than $5 a barrel in the first quarter, compared with a year earlier. The comparable price for natural gas also was down.
Still, given the rise in gasoline prices at the pump in recent weeks, oil majors such as Exxon Mobil and BP were getting little sympathy from U.S. consumers for not earning as much as they could have if market prices for their products had been higher to start 2007.
"They're hurting me all the way around," Bill LoGerfo of Staten Island said Thursday as he paid $3.27 a gallon for premium unleaded to fill up his car at a BP station in Manhattan.
"I'm in the construction business, so it makes it more expensive to get materials shipped to me," LoGerfo said. "These prices really trickle down to the little guy."
In response to the new round of oil profits, Sen. Bob Casey, D-Pa., introduced legislation Thursday that he hopes will curtail rising gas prices. Casey's bill would impose a windfall profits tax and close certain tax loopholes for big oil companies and use the money for research into biofuels and other related projects.
Exxon Mobil's profits amounted to $1.62 a share, up from $8.4 billion, or $1.37 a share, a year earlier. Analysts polled by Thomson Financial were looking for a profit of $1.52 a share.
Revenue fell to $87.2 billion from $88.9 billion a year earlier, well below the $100 billion that analysts had forecast.
Last year, the company posted the largest annual profit by a U.S. company - $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion, set in 2005.
Last month, Exxon Mobil said it will spend some of that money on more than 20 new global projects in the next three years, investments expected to add 1 million oil-equivalent barrels a day to its volumes at peak production.
The company said it spent $4.3 billion on capital and exploration projects in the first quarter and plans to spend roughly $20 billion this year on such projects.
"In the first quarter, Exxon Mobil continued to actively invest, bringing additional crude oil, finished products and natural gas to market," Chairman and Chief Executive Rex Tillerson said.
Exxon Mobil said earnings from its exploration and production arm fell to $6.04 billion from $6.38 billion a year earlier, primarily reflecting lower oil and natural gas prices and decreased demand for natural gas in Europe.
The company said oil production in the first three months of 2007 was slightly higher than a year earlier, helped in part by increased production from projects in West Africa, Russia and the Middle East. Natural gas production was off from last year, hampered by mature field declines and lower European demand related to weather.
On the refining and marketing side of the business, Exxon Mobil's earnings rose to $1.9 billion from $1.3 billion to start 2006, lifted by improved margins and more efficient refining operations.
San Antonio-based Valero's profits rose to a first-quarter record $1.14 billion, or $1.86 a share, from $848 million, or $1.32 a share, a year earlier. Analysts forecast $1.81 a share, according to Thomson Financial.
Revenue declined to $19.7 billion from $20.93 billion. Analysts were looking for $22.96 billion.
Copyright 2007 Associated Press
