First Quarter 2005 2004 Net Income $ Millions 7,860 5,440 $ Per Common Share Assuming Dilution 1.22 0.83 Earnings Excluding Special Items $ Millions 7,400 5,440 $ Per Common Share Assuming Dilution 1.15 0.83 Capital and Exploration Expenditures - $ Millions 3,417 3,401
Exxon Mobil Corporation (NYSE: XOM) reported first quarter results. Net income of $7,860 million ($1.22 per share) increased $2,420 million from the first quarter of 2004. First quarter net income included a $460 million positive impact (Downstream -- $310 million; Chemical -- $150 million) from sale of the Corporation's stake in China Petroleum and Chemical Corporation ("Sinopec"). Excluding this gain, earnings of $7,400 million ($1.15 per share) increased by $1,960 million.
Capital and exploration expenditures of $3,417 million in the first quarter of 2005 were up $16 million compared with last year.
ExxonMobil's Chairman Lee R. Raymond commented as follows:
"Compared with last year's first quarter, ExxonMobil's first quarter 2005 net income of $7,860 million was up $2,420 million. Excluding the gain on the sale of our stake in Sinopec, earnings were up $1,960 million and are the highest first quarter ever for the Corporation.
"Upstream earnings were a record $5,054 million, an increase of $1,041 million from first quarter 2004 results reflecting continued strength in crude and natural gas prices.
"Downstream earnings were $1,143 million, an increase of $139 million from last year, with improved worldwide refining conditions partly offset by weaker marketing margins.
"Chemical earnings were a record $1,282 million, up $718 million from first quarter 2004 reflecting higher margins.
"ExxonMobil continued its active investment program, spending $3,417 million in the first quarter on capital and exploration projects, compared with $3,401 million last year, reflecting continued strong levels of upstream spending.
"During the quarter, the corporation acquired 64 million shares at a gross cost of $3,624 million to offset the dilution associated with benefit plans and to reduce common stock outstanding. As a consequence of the continued strengthening of our financial position, the rate of share purchases to reduce shares outstanding will be increased by $1.0 billion in the second quarter."
Additional comments on earnings for the major operating segments follow:
First Quarter 2005 vs. First Quarter 2004
Upstream earnings were a record $5,054 million, up $1,041 million from the first quarter 2004 reflecting strong crude and natural gas prices.
Liquids production of 2,543 kbd (thousands of barrels per day) was 92 kbd lower than the first quarter of 2004. Higher production from new fields in West Africa and Norway was more than offset by natural field declines in mature areas, planned and unplanned maintenance, entitlement and divestment impacts.
First quarter natural gas production decreased to 10,753 mcfd (millions of cubic feet per day), compared with 11,488 mcfd last year reflecting natural field decline in mature areas, lower demand in Europe and divestment impacts partly offset by higher volumes in Qatar.
On an oil-equivalent basis, production decreased by 5% from the first quarter of 2004. Excluding divestment and entitlement effects, production decreased by 2%.
Earnings from U.S. Upstream operations were $1,353 million, $199 million higher than last year's first quarter. Non-U.S. Upstream earnings of $3,701 million were up $842 million from 2004.
Downstream earnings, excluding the $310 million Sinopec gain, were $1,143 million, up $139 million from the first quarter of 2004, reflecting improved U.S. refining margins and higher refinery throughput partly offset by weaker marketing conditions. Petroleum product sales were 8,229 kbd, 103 kbd higher than last year's first quarter.
U.S. Downstream earnings were $645 million, up $253 million mainly due to higher refining margins. Non-U.S. Downstream earnings, excluding Sinopec, were $498 million, down $114 million due to lower marketing earnings.
Chemical earnings, excluding the $150 million Sinopec gain, were a record $1,282 million, up $718 million from the same quarter a year ago due to improved market conditions. Prime product sales of 6,938 kt (thousands of metric tons) were up 146 kt from last year's first quarter.
Corporate and financing expenses of $79 million were lower by $62 million mainly due to higher interest income.
During the first quarter of 2005, Exxon Mobil Corporation purchased 64 million shares of its common stock for the treasury at a gross cost of $3,624 million. These purchases were to offset shares issued in conjunction with company benefit plans and programs and to reduce the number of shares outstanding. Shares outstanding were reduced from 6,401 million at the end of the fourth quarter of 2004 to 6,366 million at the end of the first quarter. In April, the Corporation increased its rate of share purchases. Purchases to reduce shares outstanding are anticipated to increase from $2.5 billion in the first quarter to approximately $3.5 billion in the second quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time.
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