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Exxon Mobil profit tops $10 billion

Fri., July 28, 2006

DALLAS — Soaring energy prices catapulted Exxon Mobil, the world’s largest publicly traded oil company, to a second-quarter profit of more than $10 billion, and they promise to ignite industrywide growth — and public outrage — all year.

Royal Dutch Shell PLC came close to matching Exxon Mobil Corp.’s 36 percent quarterly earnings boost on Thursday, posting net income of $7.3 billion, an increase of 40 percent from the year before.

The oil and gas industry’s prolific profits come as motorists in the U.S. pay an average of $3-a-gallon at the pump and as Washington lawmakers consider opening to drilling areas of the Gulf of Mexico currently off-limits — both of which have generated political backlash.

Rep. Edward Markey (D-Mass.) said Thursday that American consumers have been “tipped upside down and have (had) their savings shaken out of their pockets at the gas pump.”

Across the globe, energy-intensive businesses such as shippers and chemical manufacturers are feeling the pinch from higher prices, while oil exporting nations in the Middle East and beyond are experiencing rapid economic growth.

Crude-oil prices are hovering near $75 a barrel, and analysts do not foresee a sharp drop anytime soon given the world’s rising appetite for fuel and supply threats that pump fear into the market.

“We continue to see demand growth year over year,” Henry Hubble, Exxon’s vice president of investor relations, told analysts. “We’re selling everything we can make.”

Other oil companies reported big numbers for the quarter this week as well. BP PLC reported its quarterly profit rose 30 percent to $7.3 billion and ConocoPhillips said its earnings rose 65 percent to $5.18 billion. Chevron Corp. will round the field of five majors when it reports its second-quarter performance today.

These five were expected to earn an estimated $33.6 billion, or a 32 percent boost, according to analysts surveyed by Thomson Financial.

Already the first four have reported earning $30.16 billion.

And if prices stay at these levels, look for more record-breaking profits soon, said Fadel Gheit, analyst for Oppenheimer & Co.

“The rising tide lifts all boats,” Gheit said. “Unless there is a price collapse of oil, you will see the second half of the year best its first half.”

Exxon Mobil said earnings amounted to $1.72 per share in the April-June quarter compared with a profit of $7.64 billion, or $1.20 per share, a year ago.


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