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Earnings roundup: Chevron profits hit record

Taxi cab driver Fred Costa finishes pumping gas at a Chevron gas station in San Francisco on Thursday. Chevron Corp.'s fourth-quarter profit dropped by nine percent, but the oil company still made enough to post its third consecutive year of record earnings. (Associated Press / The Spokesman-Review)
From Wire Reports The Spokesman-Review
Taxi cab driver Fred Costa finishes pumping gas at a Chevron gas station in San Francisco on Thursday. Chevron Corp.'s fourth-quarter profit dropped by nine percent, but the oil company still made enough to post its third consecutive year of record earnings. (Associated Press / The Spokesman-Review)

Chevron Corp. pumped out its third consecutive year of record profits in 2006 despite a fourth-quarter stumble that demonstrated how quickly the oil industry can be tripped up by volatile energy prices largely out of its control.

The San Ramon-based company said Friday that it earned $3.77 billion, or $1.74 per share, during last year’s final quarter, a nine percent decrease from net income of $4.14 billion, or $1.86 per share, at the same time in 2005. The earnings were a penny above the average estimate among analysts polled by Thomson Financial.

Despite its first quarterly earnings decline in 18 months, the nation’s second largest oil company finished 2006 with a full-year profit of $17.1 billion to smash its previous record of $14.1 billion set in the previous year.

The performance contributed to another gargantuan year for the world’s largest oil companies, punctuated by Exxon Mobil Corp.’s 2006 profit of $39.5 billion — the largest in U.S. corporate history.

Last year’s combined earnings of Exxon Mobil, Chevron, ConocoPhillips, Royal Dutch Shell PLC and BP PLC are expected to exceed $120 billion — enough to buy about 175 gallons of mid-grade gasoline for every person in the United States. The combined profit also surpasses the gross domestic product of Iraq and more than 160 other countries, according to the most recent estimates compiled by the Central Intelligence Agency.

BP isn’t scheduled to release its fourth-quarter results until Tuesday. But even before factoring in BP’s final numbers for 2006, the five major oil companies already have topped their record earnings of $111 billion last year.

But 2006 may prove to be an inflection point for the industry now that oil prices are hovering around $59 per barrel — nearly $20 per barrel below the peak reached last summer.

For all of 2006, crude oil prices averaged $66 per barrel, according to an analysis by Citigroup.

“The New York Stock Exchange, the world’s largest financial marketplace, said Friday that fourth-quarter results rose strongly as the Big Board benefited from its aggressive push into electronic stock trading.

The acquisition of all-electronic market Archipelago Holdings Inc. helped the NYSE boost its market share in options trading and up the ante against rival Nasdaq Stock Market Inc. The NYSE is in the midst of the biggest changes in its 217-year history, expanding globally with alliances in Asia and its acquisition of Paris-based Euronext NV.

“Shares of Amazon.com Inc. fell more than 3 percent Friday after the Internet retailer reported its fourth-quarter profit dropped by half despite higher sales during the holiday shopping season.

After the market closed Thursday, the company reported it earned $98 million, or 23 cents per share, in the three months ended Dec. 31 compared with $199 million, or 47 cents per share, in the year-ago period.

Net sales rose 34 percent to $3.9 billion from $2.98 billion in the fourth quarter of 2005. The company said sales would have been up by 30 percent without the favorable $122 million impact of changes in foreign exchange rates.