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Exxon Mobil Earnings Up 32 Percent

Posted on: Friday, 29 July 2005, 18:00 CDT

Jul. 29--Despite a decline in production, Exxon Mobil reported a 32 percent increase in second-quarter profit Thursday, to $7.64 billion, or $1.20 per share.

The earnings, the third-largest in company history, were powered by a 28 percent increase in profit from sales of oil and natural gas. Henry Hubble, the company's chief financial officer, said industry conditions remained "robust."

Exxon Mobil ended the quarter with more than $25 billion in cash. It spent $4.5 billion on capital projects in the second quarter and $3.5 billion to buy back 64 million shares of common stock.

Some investors have questioned how long the big energy companies can churn out record profits. But Byron Goodrich, an analyst with A.G. Edwards, said, "Given current trends, we expect positive earnings momentum to continue."

The Irving multinational reported a 4 percent drop in oil and gas production, mostly from the sale of $2 billion in producing properties. The company sold off $1.8 billion in properties in the first quarter.

"That's a pretty strong acceleration for asset sales," said Paul Sankey, an analyst with Deutsche Bank. He said he wondered whether more were imminent.

Hubble said the asset sales, which have included a number of Exxon Mobil's Texas properties, is a continuing program.

Exxon Mobil is giving up its long-dominant position in Texas. As recently as 1999, when Exxon Corp. merged with Mobil Oil, the two companies were the largest producers of crude oil and natural gas in Texas.

Last year, the combined Exxon Mobil dropped to fourth among both oil and natural-gas producers.

Hubble said that Exxon Mobil will emphasize international projects, noting big gains in production in Africa and the planned opening of the huge natural-gas field in Qatar.

Exxon Mobil plans to spend up to $15 billion to develop the Qatar field so the gas can be liquefied for shipment to Europe and the United States.

In addition to the strong performance of its exploration and production units, Exxon Mobil also benefited from stronger margins at its refineries and chemical operations.

Exxon Mobil shares (ticker: XOM) rose 40 cents to $60 on the New York Stock Exchange.

OTHER EARNINGS:

--Royal Dutch Shell, The Hague, Netherlands: The oil giant announced a 34 percent increase in second-quarter profit to $5.24 billion, below analysts' expectations of $5.509 billion. Revenue jumped 33 percent to $82.64 billion, according to the company, which reported earnings Thursday as one entity for the first time after last week's unification of its parents, Shell Transport & Trading and Royal Dutch Petroleum. Royal Dutch Shell's stock price fell 37 cents to close at $29.70 on the Euronext stock exchange.

--Aetna, Hartford, Conn.: The third-largest U.S. health insurer said quarterly profit rose 43 percent as the company added customers and reduced costs. Second-quarter net income increased to $409.7 million, or $1.35 a share, from $286.3 million, or 90 cents a share, a year earlier. Revenue rose 13 percent to $5.5 billion. Aetna shares (AET) rose $3.78, or 5 percent, to $78.40.

--Whole Foods Market, Austin: The largest U.S. natural-foods grocer said third-quarter profit rose 31 percent as the expanding chain drew more shoppers. Net income climbed to $41.7 million, or 60 cents a share, from $31.8 million, or 48 cents, a year earlier. Sales in the 12-week quarter ended July 3 increased 23 percent to $1.13 billion.

This Report Contains Material From the Associated Press and Bloomberg News.

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Copyright (c) 2005, Fort Worth Star-Telegram, Texas

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XOM, AGE, SC, RD, SHEL, AET, WFMI,

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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