Exxon 3Q Profit Rose 55% on Higher Prices
(Dow Jones Newswires), Oct. 28, 2010
Exxon Mobil's third-quarter earnings rose 55% compared with the year-ago period as the oil giant benefited from stronger refining margins, higher commodity prices and a 20% jump in production.
Exxon Mobil's output increased to 4.5 million barrels of oil equivalent per day, mainly thanks to the addition for the first time of production from natural gas producer XTO, which the oil giant acquired in June. Higher energy output in Qatar also boosted the company's results.
Exxon, the largest U.S. oil company by market value, reported a profit of $7.35 billion, or $1.44 a share, up from $4.73 billion, or 98 cents a share, a year earlier. Better-than-expected refining and marketing results, which more than tripled on higher international refining margins, helped the Irving, Texas company beat analysts' expectations of $1.38 per share. Revenue rose 16% to $95.3 billion.
Exxon's quarterly results mirrored the boost that a rebound in the refining business has brought this quarter to other major oil companies. European rival Shell Thursday beat analysts' forecasts to post an 88.4% rise in adjusted profit driven in part by greater demand for refined products and chemicals. ConocoPhillips (COP) said Wednesday its third-quarter earnings more than doubled in part because of higher refining margins.
The profitability of the refining business has recovered in recent months, as demand for fuel improved thanks to the strengthening of the economy.
XTO's contribution to Exxon Mobil's results this quarter was mostly in line with analysts' expectations, but investors still remain concerned about the financial benefits of the $36 billion acquisition, especially at a time when natural gas prices are low, says Stacey Hudson, an analyst at Raymond James. ExxonMobil has said the benefits of XTO acquisition will be seen in the long term.
Exxon spent another $3.3 billion in share buybacks during the quarter, and said it will repurchase $5 billion in shares in the fourth quarter. The company said capital and exploration spending for the first nine months of 2010 was $22.2 billion, up 18% from the first nine months of last year.
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