Exxon Mobil, ConocoPhillips Q2 Profit Drops

(RTTNews) - Oil and natural gas giant Exxon Mobil Corp. (XOM) reported Thursday a profit for the second quarter that declined 57 percent from last year, which was boosted by significant gains from asset sales. Stripping down the gains, profit would have dropped only 19 percent on dwindling production of oil and gas. Oil and gas production declined from last year.

Meanwhile, rival oil giant ConocoPhillips (COP) reported a profit for the second quarter that declined from last year, reflecting the impact of asset sales. Oil and gas production grew strongly from last year. The company also raised its full-year 2013 production guidance, and increased quarterly dividend by 4.5 percent.

Looking at Exxon's results, the Irving, Texas-based world's largest energy company reported net income of $6.86 billion or $1.55 per share for the second quarter, sharply lower than $15.91 billion or $3.41 per share in the prior-year quarter.

Earnings for the year-ago quarter included a net gain of $7.5 billion associated with divestments and tax-related items. Excluding items, earnings per share were down 14 percent.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.90 per share in the quarter. Analysts' estimates typically exclude one-time items.

"ExxonMobil's second quarter results reflect continued strong operational performance and investments to meet growing demand for oil, natural gas and chemical products in the years ahead," Chairman Rex Tillerson said in a statement.

Total revenues and other income for the quarter declined to $106.47 billion from $127.36 billion in the same quarter last year, but topped six Wall Street analysts' consensus estimate of $105.54 billion by a whisker.

Upstream or exploration and production, earnings for the quarter declined 25 percent from the year-ago quarter to $6.31 billion.

Oil-equivalent production declined 1.9 percent from last year to 4,074 thousands of oil equivalent barrels per day or koebd. Liquids production was down to 2,182 thousands of barrels per day or kbd from the prior year's 2,208 kbd. Natural gas production for the quarter was 11,354 millions of cubic feet per day or mcfd, lower than last year's 11,661 mcfd.

Downstream or refining and marketing, earnings plunged to $396 million from $6.65 billion in the prior-year quarter, which was boosted by a $5.3 billion gains related to Japan restructuring.

The company noted that weaker refining margins and volumes associated with planned refinery turnaround and maintenance activities adversely impacted downstream earnings.

Chemical segment earnings dropped to $756 million from last year's $1.45 billion. During the quarter, the company's petroleum product sales decreased to 5,765 kbd from last year's 6,171 kbd.

Capital and exploration expenditures increased 10 percent to $10.24 billion from last year.

"The Corporation distributed $6.8 billion to shareholders in the second quarter through dividends and share purchases to reduce shares outstanding," Tillerson added.

Meanwhile, Houston, Texas-based ConocoPhillips reported earnings of $2.05 billion or $1.65 per share for the second quarter, lower than $2.27 billion or $1.80 per share in the prior-year quarter.

Results for the latest quarter primarily include a $234 million gain related to pending claims and settlements, while the year-ago quarter primarily included a $285 million gain on asset sales and a $534 million gain from discontinued operations from downstream operations prior to the separation of Phillips 66 on April 30, 2012.

Excluding items, adjusted earnings for the quarter was 1.75 billion or $1.41 per share, compared to $1.50 billion or $1.19 per share in the year-ago quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.29 per share for the quarter.

Total revenues and other income for the quarter decreased to $14.14 billion from $14.84 billion in the same quarter last year. Analysts estimated revenues of $12.75 billion for the quarter.

Production from continuing operations for the quarter grew to 1.510 million barrels of oil equivalent or BOE per day from 1.489 million BOE per day in the year-ago quarter.

"We had a very strong quarter, with our base operations and turnaround activity performing as planned. Production exceeded expectations as growth continued from our development programs, notably in the Eagle Ford where production nearly doubled compared with a year ago," Chairman and CEO Ryan Lance stated.

Looking ahead to the third quarter, ConocoPhillips forecasts production from continuing operations in a range of 1,460 to 1,490 MBOED, reflecting planned downtime and turnaround activity.

For fiscal 2013, ConocoPhillips now projects production from continuing operations in a range of 1,515 to 1,530 MBOED, up from the prior guidance of 1,485 to 1,520 MBOED.

"We are delivering on our 3 to 5 percent growth targets for both volumes and margins and have raised our full-year production guidance. We also reaffirmed our commitment to shareholders, and confidence in our long-term plans, by increasing the dividend rate in July," Lance added.

In Thursday's regular trading session, XOM is currently trading at $91.76, down $1.99 or 2.12% on a volume of 8.54 million shares, while COP is trading at $65.68, up $0.82 or 1.26% on a volume of 2.03 million shares.