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Thirst for Oil Lifts Exxon Profit to 3rd-Highest Level in 123 Years ; Sales Set a Record for Public Company

Posted on: Friday, 29 July 2005, 15:00 CDT

IRVING, Texas - Exxon Mobil Corp., the world's largest publicly traded oil producer, said second-quarter profit rose 32 percent, to $7.64 billion, as growing economies in Asia and North America consumed more crude and gasoline.

The profit was the third-highest in the company's 123-year history. Sales rose 25 percent, to $88.6 billion, a record for a public company. A doubling of oil prices since 2003 has put Irving- based Exxon Mobil on pace to surpass Wal-Mart Stores Inc. this year as the largest U.S. company by sales.

Profit from oil and natural-gas sales jumped 28 percent, to $4.9 billion, Exxon Mobil said Thursday in a statement. The gap between crude costs and prices for refined fuels was the widest ever, as consumption rose faster than supplies. Exxon Mobil's refining profit surged 34 percent.

"Oil is the best investment there is right now," said Eric Sprott, who oversees $2.5 billion Canadian ($2.02 billion) at Sprott Asset Management Inc. in Toronto. "Demand keeps rising, and there's no spare capacity left in the world."

Net income climbed to $1.20 a share from $5.79 billion, or 88 cents a share, a year earlier, Exxon Mobil said. Chief Executive Lee Raymond, 66, is investing in oil and gas fields in Africa and the Middle East as demand grows and output declines from older wells in Europe and North America. The company pumps more oil than any OPEC members except Saudi Arabia and Iran.

Exxon Mobil on Thursday increased its 2005 spending plan by 6.3 percent, to $17 billion, because of rising costs to develop projects in Nigeria and elsewhere.

Raymond used windfall profits to increase stock buybacks by 48 percent during the second quarter to $3.7 billion. The company said it will increase buybacks to $5 billion in the current quarter.

Soaring demand for gasoline, diesel, jet fuel and chemicals helped boost U.S. crude-oil futures to a second-quarter average of $53.22 per barrel, more than making up for a decline in Exxon Mobil's worldwide output. The company said it produced the equivalent of 3.91 million barrels of oil a day, down 4.3 percent from a year earlier.

Exxon Mobil shares rose 40 cents, to $60, in New York Stock Exchange composite trading. The stock has climbed 17 percent this year, pushing Exxon Mobil past General Electric as the world's largest company by market value. Wal-Mart had moved ahead of Exxon Mobil, becoming No. 1 in sales in 2001.

Source: Record, The; Bergen County, N.J.

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