Oil Giants’ Earnings Rise in 2nd Quarter

Exxon Mobil Corp. and Chevron Corp., the two largest U.S. oil companies, posted higher second-quarter earnings, thanks to lofty crude oil and natural-gas prices and higher profits in their refining businesses.

Exxon Mobil’s results missed analyst expectations, however, while Chevron easily beat forecasts.

Exxon Mobil, the No. 1 oil company, said operating earnings rose 5.5% to $4.38 billion, or 64 cents a share, from $4.15 billion, or 60 cents, a year ago, as revenue edged up 0.9% to $56.46 billion. The results fell below the 66-cent average estimate of analysts.

“This is a good quarter, the only negative is that historically they have had upside surprises,” said AABN Amro analyst Gene Nowak.

Higher prices for crude oil and natural gas helped profit at Exxon Mobil’s exploration and production business jump 42.5% to $2.85 billion. The company’s refining, marketing and transportation earnings were up 27% to $1.27 billion.

The chemical business for Irving, Texas-based Exxon Mobil, considered one of the most balanced energy companies, was hurt by the same high energy prices that have been lifting profit from its other business. Crude and natural gas are key raw materials in the chemicals industry.

At No. 2 Chevron, profit rose 21% to $1.38 billion, or $2.15 a share, compared with the $2.06 average estimate of analysts polled by First Call/Thomson Financial. Earnings at San Francisco-based Chevron’s U.S. refining and marketing business nearly doubled from a year ago, while its international refining, marketing and transportation earnings also rose.

Oil refining companies Valero Energy Corp., Sunoco Inc. and Ultramar Diamond Shamrock Corp. also posted higher second-quarter earnings.

Valero said earnings more than tripled to $274.8 million, or $4.23 a share, beating expectations of $4.20. Revenue rose 33% to $4.5 billion. Valero agreed to buy Ultramar in May to create the second-largest U.S. oil refiner behind Exxon Mobil. Ultramar said its profit more than doubled to $268 million, or $3.65 a share, as revenue grew 27% to $5.11 billion. The results far exceeded analyst expectations of $3.06. Sunoco posted a 55% jump in profit to $204 million, or $2.44 a share, well beyond analyst forecasts of $2.02, on a 5.2% rise in revenue to $3.82 billion.

On the New York Stock Exchange, Exxon Mobil shares fell $1.53, or 3.6%, to $40.97; Chevron fell $2.46 to $85.18; Valero fell $1.13 to $32.90; Ultramar fell 70 cents to $45.65; and Sunoco fell 99 cents to $32.84.