Exxon Mobil posts record U.S. profit

Exxon Mobil posts record U.S. profit


Thursday October 27, 10:40 AM EDT

By Deepa Babington

NEW YORK (Reuters) - Exxon Mobil Corp. on Thursday posted a quarterly profit of $9.9
billion, the largest in U.S. corporate history, as it raked in a bonanza from record oil and
gas prices.

While profit was up 75 percent and revenue rose 32 percent to more than $100 billion, the
results fell short of Wall Street forecasts due to production outages caused by Hurricanes
Katrina and Rita and sharply lower profit at the company's chemicals division.

Analysts have warned that record profits for Big Oil, at a time when consumers are paying
sky-high prices for gasoline, could add to calls for a windfall profits tax or other penalties
on oil companies.

Third-quarter net income at Exxon, the world's largest publicly traded oil company, rose
to $9.92 billion, or $1.58 a share, from $5.68 billion, or 88 cents a share, a year earlier.


Excluding a gain of $1.62 billion from restructuring its stake in a Dutch gas transportation
business, earnings were $1.32 per share. On that basis, analysts' average forecast was
$1.39, according to Reuters Estimates.

"They were a bit disappointing, but this a temporary phenomenon," said Paul Kuklinski, an
analyst with Boston Energy Research/Soleil Securities. "This is largely attributable to
hurricane effects."

Exxon shares rose slightly in early trade on the New York Stock Exchange.

Exxon's record earnings topped the $9 billion net profit reported on Thursday by Royal
Dutch Shell Plc and were well above the best quarterly performances by Citigroup Inc., the
world's largest bank -- $7.2 billion -- and conglomerate General Electric Co. -- $5.6
billion -- according to Reuters Fundamentals.

Oil and gas companies have been enjoying an unusually rosy environment for months. In
the third quarter, they were helped by Katrina and Rita, which ripped through the Gulf of
Mexico, disrupting energy operations in the region and sending oil prices and refining
margins sharply higher.

In addition to calls for a windfall profits tax or other penalties, lawmakers and consumer
advocates have been urging oil companies to expand refining capacity and take other
steps to help bring down gasoline prices.

"We're already seeing some companies yielding to pressure," said Oppenheimer & Co.
analyst Fadel Gheit. "But everybody is waiting for the big lady to sing, which is Exxon."

PRODUCTION FALLS

Exxon's oil and gas production fell 4.7 percent in the third quarter from a year earlier as
outages caused by Katrina and Rita, maintenance activities, and maturing fields more than
offset higher production from new fields in West Africa.

Excluding the impact of the hurricanes, divestments and entitlement effects, output fell 1
percent.

Still, record crude oil prices -- which touched $70 a barrel in the quarter -- pushed
earnings at its exploration and production unit to $5.73 billion, up $1.8 billion from a year
earlier.

At its refining and marketing operations, profit rose to $2.13 billion, up $727 million from
a year earlier. Stronger refining margins outweighed weak marketing margins and lower
petroleum product sales.

Earnings at its chemicals division tumbled to $472 million, down $537 million from a year
earlier, due to higher feedstock costs and lower margins.

Exxon Mobil's capital expenditures jumped to $4.41 billion from $3.63 billion a year
earlier.

Shares of Exxon Mobil, the largest of the so-called "super-major" oil companies, were up
70 cents to $56.90 in morning trade on the New York Stock Exchange. The shares rose
more than 10 percent in the third quarter but underperformed the broader Standard &
Poor's integrated oil and gas index, which rose more than 13 percent.