Conoco Profit Soars 89% to Record
ConocoPhillips, the No. 3 U.S. oil company, said Wednesday that third-quarter profit jumped 89% to a record $3.8 billion as supply disruptions and rising demand lifted energy prices to unprecedented highs.
The results set the stage for what are expected to be even larger quarterly earnings from Exxon Mobil Corp. and Chevron Corp., the largest and second-largest U.S. oil firms, respectively. Exxon Mobil is expected to report its results today; Chevron is expected to report Friday.
Houston-based ConocoPhillips said net income rose to $2.68 a share from $2.01 billion, or $1.43, a year earlier. Per-share profit was 11 cents higher than the average estimate of analysts surveyed by Thomson Financial.
The company’s revenue soared 43% to $49.7 billion.
The energy industry overall may have had the most profitable quarter in its history as hurricanes Katrina and Rita idled offshore wells and Gulf Coast refineries, pushing oil, natural gas and gasoline prices to records.
Oil prices have pulled back in recent weeks but remain above $60 a barrel.
“The economics of oil are great right now,” said Phil McPherson, director of research at Irvine-based investment bank C.K. Cooper & Co.
Gains in gasoline and diesel prices more than made up for output losses at three ConocoPhillips plants that were damaged by Katrina.
The company’s oil and gas production in the quarter rose 22% to the equivalent of 1.79 million barrels of oil a day, largely on the purchase of shares of Russia’s Lukoil.
Chief Executive James Mulva increased ConocoPhillips’ stake in Lukoil, Russia’s largest oil firm, to 14.8% during the quarter from 12.6% three months earlier.
Third-quarter refining earnings almost doubled to $1.39 billion from $708 million a year earlier, ConocoPhillips said. The company, the second-largest U.S. refiner, sells fuel under the Conoco, Phillips and 76 brands.
Mulva said ConocoPhillips spent $3.6 billion in the quarter on capital projects and investments, paid $430 million in dividends, bought back $588 million in stock and reduced debt by $516 million.
The company’s shares rose 36 cents to $62.80.
Among other oil giants, Amerada Hess Corp. and Kerr-McGee Corp. also posted quarterly results Wednesday. Amerada Hess said its profit rose 53% to $272 million, or $2.60 a share. At Kerr-McGee, net income soared 48-fold to $359 million, or $3.09 a share. Year-earlier results included one-time write-offs.
Exxon Mobil and Chevron both declared quarterly dividends Wednesday. Exxon Mobil’s was unchanged at 29 cents a share; Chevron’s was unchanged at 45 cents a share.
