Oil Companies See Profits Soar

Unocal Corp., Exxon Mobil Corp. and Royal Dutch/Shell Group said their third-quarter profits soared from a year earlier on the crest of record oil prices, but those prices again fell Thursday as analysts debated whether the oil market has peaked.

Unocal, an El Segundo-based production and exploration company, and Anglo-Dutch company Royal Dutch/Shell said profit more than doubled in the quarter ended Sept. 30, compared with a year earlier, exceeding analysts’ forecasts.

Exxon Mobil, the nation’s largest oil company, said earnings jumped 56% from a year earlier. Its third-quarter sales rose 28% to $76.4 billion -- the largest quarterly sales ever recorded by a publicly held U.S. company.

This year’s surge in crude prices has pumped up the oil industry’s sales and profits, offsetting lower production levels and higher exploration costs at some of the companies.

Unocal said net income rose to $330 million, or $1.23 a share, from $152 million, or 58 cents, a year earlier. The results included various one-time gains and charges, including $38 million in tax benefits.

Excluding those special items, Unocal said profit in the latest quarter climbed to $294 million, or $1.09 a share, from $190 million, or 72 cents, a year earlier. On that basis, Unocal was expected to earn 96 cents a share in the latest quarter, according to analysts surveyed by Thomson First Call.

Unocal’s third-quarter revenue rose 33% to $1.96 billion from $1.47 billion a year earlier. With oil prices still at lofty levels, “we expect again to post a strong fourth quarter,” Chief Executive Charles Williamson told analysts on a conference call.

The company -- which explores in such regions as the Gulf of Mexico, Indonesia, Thailand and Bangladesh -- also said its third-quarter average production edged higher from the second quarter, to the equivalent of 407,000 barrels a day.

That’s down 8% from a year earlier, owing partly to Unocal’s sale of some oil-and-gas properties in North America. But it’s a slight improvement from Unocal’s revised forecasts this year. Twice the company had scaled back those projections, with the latest downward revision in August at 400,000 barrels.

“Production was good and at least beat expectations, and they’re set to do the same in the fourth quarter,” said Steve Enger, an analyst with the energy investment firm Petrie Parkman & Co.

Unocal said it expected to earn $1.15 to $1.30 a share in the fourth quarter, but the forecast was based on oil averaging $53 a barrel. Whether that happens is an open question.

After hitting a record close of $55.17 a barrel on Oct. 22, crude prices have skidded more than $4 a barrel this week. Oil for December delivery dropped $1.54 a barrel, to $50.92, in Thursday’s trading on the New York Mercantile Exchange.

Exxon Mobil said its profit rose to $5.68 billion, or 88 cents a share, from $3.65 billion, or 55 cents, a year earlier.

On the New York Stock Exchange, Unocal’s shares fell 50 cents to $40.87 while Exxon Mobil slipped 35 cents to $48.61.

Royal Dutch/Shell Group is composed of two companies and announced plans to merge Thursday. In NYSE trading, U.S.-traded Shell shares closed up 64 cents at $47.41, while U.S.-traded Royal Dutch shares finished up 28 cents at $54.11.