Oil Prices Lift Exxon Mobil Profit

foxnews.com Thursday, January 30, 2003

NEW YORK  — Exxon Mobil Corp. (XOM) on Thursday said quarterly profit rose by more than 50 percent, as sharply higher oil and gas prices helped fuel better-than-expected results.

Exxon Mobil, the world's No. 1 publicly-traded oil company, saw benchmark oil prices rise by more than 40 percent from the previous year's quarter alongside fears of a potential war in Iraq and a labor strike in Venezuela, one of the largest crude exporters in the world.

The company's fourth-quarter net income rose to $4.09 billion, or 60 cents a share, as a result, jumping 53 percent from the $2.68 billion, or 39 cents a share, it reported for the year-ago quarter.

Excluding special items, the Irving, Texas company reported earnings per share of 56 cents, or 6 cents higher than the Thomson First Call consensus estimate. Revenue jumped 18 percent to $56.21 billion.

Shares of Exxon Mobil, a component of the Dow Jones industrial average, were up 1.7 percent Thursday morning, after rising almost 10 percent during the fourth quarter.

But while the rally in oil prices lifted its exploration and production division's profit by 73 percent to $3 billion, it took a toll on the company's refining and marketing and chemicals businesses, which use crude as a key raw material.

"It was pretty clearly a strong quarter, though I don't think it's indicative of a company firing on all cylinders," said Tyler Dann, an analyst at Banc of America Securities who rates the company a "neutral" and doesn't own any shares.

"I think chemicals could clearly do better and even the downstream, you could argue, might do better down the road."

Downstream, or refining and marketing, earnings fell 19 percent to $821 million, reflecting weaker industrywide conditions.

Refiners struggled through last year as high inventories of products such as jet fuel and gasoline hurt profit margins. Companies such as Exxon Mobil, which not only produce oil, but refine it into products such as gasoline to be sold at retail stations, are banking on a turnaround this year.

Banc of America's Dann is one of the industry-watchers that believes the refining and marketing business may improve in 2003.

"We think that this company's leverage to that is significant, especially outside the United States," he said. "It just so happens that they have a more balanced asset portfolio between exploration and production, downstream and chemicals."

The chemicals business posted a 64 percent drop in earnings to $76 million, on worldwide margins that fell because of higher costs for oil, gas and other raw materials.

Shares of Exxon Mobil rose 56 cents, or 1.7 percent, to $34.41 in Thursday morning trade on the New York Stock Exchange.

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