Exxon Mobil posts $40.6 billion annual profit
Exxon Mobil posts $40.6 billion annual profit
Oil giant breaks record for largest annual profit by a U.S. company
HOUSTON - Exxon Mobil Corp. posted the largest annual profit by a U.S. company — $40.6 billion — on Friday as the world’s biggest publicly traded oil company benefited from historic crude prices at the end of the year.
Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, beating its own mark of $10.71 billion in the fourth quarter of 2005.
The previous record for annual profit was $39.5 billion, which Exxon Mobil had in 2006.
The eye-popping results weren’t a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50 percent higher than a year ago.
Crude prices reached an all-time trading high of $100.09 on Jan. 3 but have fallen about 10 percent since then.
The record profit for the October-December period amounted to $2.13 a share versus $1.76 a share in 2006. Year-ago net income was $10.25 billion.
Also extraordinary was Exxon Mobil’s revenue, which rose 30 percent in the fourth quarter to $116.6 billion from $90 billion a year ago. For the year, sales rose to $404.5 billion — the most ever for the Irving, Texas-based company — from $377.64 billion in 2006.
In addition to benefiting from higher commodity prices, the company said its results were evidence of a well-run, globally diverse operation that’s investing billions to find more energy supplies. It noted that its capital and exploration spending amounted to nearly $21 billion last year, up 5 percent from 2006.
Exxon Mobil produces about 3 percent of the world’s oil.
Its shares fell 13 cents to $86.27 in afternoon trading after rising as high as $87.86 earlier in the session. The shares have traded in a 52-week range of $69.02 to $95.27.
Higher commodity prices in the quarter were clearly evident from earnings at Exxon Mobil’s exploration and production arm, known as the upstream. Income rose 32 percent to $8.2 billion from $6.2 billion a year ago.
On an oil-equivalent basis, production increased nearly 1 percent from the fourth quarter of 2006, driven by higher demand for natural gas in Europe. Excluding the expropriation of its Venezuelan assets last year, divestments and other factors, production rose nearly 3 percent.
Refining and marketing, or downstream, earnings were $2.3 billion, up from nearly 2 billion in the year-ago quarter, as improved refining operations offset lower U.S. refining margins.
In the U.S., downstream earnings were off sharply from a year ago — $622 million in the most-recent quarter versus $945 million in 2006.
Refining margins — the difference between the cost of crude and what the company makes on refined products such as gasoline — have been squeezed in recent months as spiking oil prices outpaced increases in gasoline prices and other refined products.
Already, ConocoPhillips has said record oil prices at the end of 2007 helped it post a 37 percent increase in fourth-quarter profit, even as it produced less crude and natural gas than a year earlier. Its quarterly net income rose to $4.37 billion versus $3.2 billion a year earlier.
ConocoPhillips is the nation’s third-largest integrated oil company behind Exxon Mobil and Chevron Corp.
Chevron reported separately Friday that its profit rose 29 percent in the fourth quarter, as surging prices for crude oil offset weak results from its refining business. It earned $4.88 billion, or $2.32 per share, from $3.77 billion, or $1.74 per share, a year earlier. Revenue rose 29 percent to $61.41 billion from $47.75 billion.
On Thursday, Royal Dutch Shell PLC, Europe’s largest oil company, posted a 60 percent gain in fourth-quarter profit to $8.47 billion on asset sales and higher oil prices. Shell said full-year net profit was a company record $31.3 billion, up 23 percent from the prior year.
Shell's 'obscene' £13.9billion profit is biggest ever by British company
Shell's 'obscene' £13.9billion profit is biggest ever by British company
Last updated at 11:53am on 31st January 2008
Shell smashed all-time British company profit records today, posting 2007 earnings of $27.5billion (£13.9billion), and immediately ran into a storm with union leaders, who are demanding the Government hits the oil giant with a windfall tax.
Shell's profit surge - it is now making a staggering $75million (£38million) a day - on the back of a booming oil price that touched $100 a barrel this winter, was labelled as "obscene" by Tony Woodley of Unite, the UK's largest trade union, as Britons struggle with soaring energy costs.
"Shell shareholders are doing very nicely while the rest of us are paying the price and struggling," said Woodley.
Shell's profits come as prices at the petrol pump rocket
"There are no problems with profits, but consumers should question the excessive mega-profits of the oil companies in light of UK companies and hauliers saying they are being pressed on high fuel and energy costs, pensioners struggling to pay energy bills and motorists struggling to fill their petrol tanks."
Shell angrily rejected the claims, arguing that a windfall tax in Britain would be illogical because the vast amount of its business is done around the world.
Shell's Chief Executive Jeroen van der Veer called the profits "satisfactory" as production levels fell for the fifth consecutive year.
Responding to Mr Woodley's attack Mr van der Veer said that in the UK taxes accounted for more than half the cost of petrol at the pumps. "We have no influence over that," he said.
The company also claimed it is as good as matching its annual profits with huge investments - between $24 billion and $25 billion of capital expenditure this year - to find new energy sources.
"We are investing a lot of money to have the energy production to satisfy the energy demand of the world," said finance director Peter Voser.
Shell Chief Executive Jeroen van der Veer at a press conference today
"We are investing for the future of society so that people can live the life they want. That is our job."
Despite the surge in full-year profits, up 9 per cent from 2006, there was disappointment with the figures in the City.
Analysts had been pencilling in underlying "clean" profits for the fourth quarter of more than $5.8billion, but the figure came in at $5.7 billion.
Upstream production, which accounts for more than half of profits, averaged out at 3.315 million barrels of oil or their gas equivalent a day, just squeezing in to the forecast of between 3.3 million and 3.5 million.
That itself had been a major downgrade from the 3.8 million Shell had previously predicted. The company today said it expected production levels to fall again in 2008.
The biggest issue for Shell is the shutout from wells it has been co-producing in *****ia - potentially 800,000 barrels a day - where local militia continue to demand that the world's major companies quit the ***** Delta.
Jeroen van der Veer, the chief executive of Royal Dutch Shell, said: "These are satisfactory results. We have made good progress in 2007, launched new projects upstream and downstream, and achieved exploration success."
The fourth-quarter dividend is up 11 per cent at 36 US cents, and the company said it would be increasing this year's first-quarter payout by a similar amount to 40 cents.
