Exxon Mobil quarterly profit $9.9 bln,biggest ever

UPDATE 4-Exxon Mobil quarterly profit $9.9 bln,biggest ever
Thu Oct 27, 2005 12:39 PM ET
(Recasts, adds conference call comments)
By Deepa Babington
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh41755_2005-10-27_16-39-46_n27195944_newsml

NEW YORK, Oct 27 (Reuters) - Exxon Mobil Corp. (XOM.N: Quote, Profile,
Research) on Thursday posted a quarterly profit of $9.9 billion, the largest
in U.S. corporate history, as it raked in a bonanza from soaring oil and gas
prices.

Record profits for Big Oil at a time when consumers are paying sky-high
prices for gasoline have brought calls for a windfall profits tax or other
penalties on oil companies.

The companies have been enjoying an unusually rosy environment for months.
In the third quarter, oil prices and refining margins rose sharply after
Hurricanes Katrina and Rita ripped through the Gulf of Mexico, disrupting
energy operations in the region.

While Exxon's quarterly profit was up 75 percent from a year earlier, and
revenue rose 32 percent to more than $100 billion, the results fell short of
Wall Street forecasts due to production outages caused by the hurricanes and
sharply lower profit at the company's chemicals division.

"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 fell slightly in midday trade.

The world's largest publicly traded oil company said net income jumped 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, 7 cents below
the average forecast among analysts polled by Reuters Estimates.

The record earnings topped the $9 billion net profit reported on Thursday by
Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) and were well above
the best quarterly performances by Citigroup Inc. (C.N: Quote, Profile,
Research) , the world's largest bank -- $7.2 billion -- and conglomerate
General Electric Co. (GE.N: Quote, Profile, Research) -- $5.6 billion --
according to Reuters Fundamentals.

EXPANSION OF CAPACITY

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.

U.S. Energy Secretary Sam Bodman said on Thursday that oil firms have a
responsibility to boost refining capacity in times of record profits.
Marathon Oil (MRO.N: Quote, Profile, Research) said it would do just that,
announcing a $2.2 billion expansion of its Garyville, Louisiana, refinery.

"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."

Exxon said it did not see the point of a windfall profits tax.

"Frankly, if you're trying to encourage supply growth, it seems odd to put
in place disincentives," Henry Hubble, vice president of investor relations
for Exxon, said on a conference call with analysts.

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

Shares of of Exxon, the largest of the so-called "super-major" oil
companies, were down 10 cents to $56.10 at midday 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 climbed more than 13 percent. (Additional reporting by Ben Berkowitz)


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