Essex502
07-28-2004, 06:25 AM
Conoco Q2 profit boosted by refining
By Lisa Sanders, CBS.MarketWatch.com
Last Update: 9:51 AM ET July 28, 2004
DALLAS (CBS.MW) -- ConocoPhillips said Wednesday that second-quarter results almost doubled from a year earlier, as refineries ran at 98 percent of capacity in the U.S., nearly doubling earnings from that segment.
Shares fell 4 cents to $76.43 as the company missed analysts' expectations.
Houston-based ConocoPhillips the third largest U.S. integrated oil company behind ExxonMobil and ChevronTexaco, said second-quarter net income climbed to $2.08 billion, or $2.97 a share, from $1.19 billion, or $1.73 a share, in the year-ago period.
Profit from operations came in at $2.01 billion, or $2.88 a share, up from $1.1 billion, or $1.60 a share.
Analysts polled by Thomson First Call expected ConocoPhillips to earn $2.92 a share, on average.
Second-quarter revenue increased to $31.9 billion from $25.6 billion. ConocoPhillips said it generated enough cash during the quarter to invest $1.6 billion in capital projects, pay $296 million in dividends and reduce debt by about $1.5 billion.
"Overall, our operating performance for the quarter was good, but there were opportunities to do better," said Jim Mulva, president and chief executive, in a statement. "Due to unscheduled downtime, we did not realize the full potential of our assets in a high price and high margin environment."
From exploration and production, ConocoPhillips earned $1.35 billion vs. $1.26 billion in the first quarter of 2004 and $1.08 billion in the year-earlier period.
The company attributed the sequential growth in profit to higher crude oil prices, but lower volumes, lower gains from asset sales, higher impairments, and higher operating costs tempered results.
Compared with a year ago, higher crude and natural gas prices outweighed lower volumes, lower benefits from changes in tax law, and higher impairment and dry-hole costs.
Daily production for the quarter averaged 1.56 million barrels of equivalent a day, despite the sale of an asset that yielded 18,000 boe a day and unscheduled downtime at the Britannia field (15,000 boe a day) in the North Sea.
Realized crude prices rose to $34 a barrel from $30.35 a barrel in the first quarter. Natural gas prices averaged $5.36 per thousand cubic feet in the lower 48 U.S. states and $4.43 per mcf worldwide vs. $4.91 mcf and $4.43 mcf, respectively, in the first quarter.
Refining and marketing brought in $818 million against $464 million in the previous quarter and $321 million in the second quarter of 2003.
"The increase in second-quarter [refining and marketing] earnings, compared with the first quarter of 2004, was primarily driven by higher U.S. refining margins," the company said in its earnings report. "The company's domestic facilities ran at 98 percent crude oil capacity utilization."
But realized margins were hurt by unplanned downtime at a unit of a Pennsylvania refinery and extended turnaround for a unit of a Louisiana refinery, the company said.
Marketing results were affected in part by unfavorable inventory.
Worldwide, the company's refineries ran at 92 percent of capacity, down from 95 percent in the first quarter.
Earnings from chemicals operations rose $7 million to $46 million compared with the first quarter. A year ago, Conoco earned $12 million from the business.
reprinted without permission of CBS Marketwatch
Comment: The higher refinery margins noted above reflect directly in the price of gasoline at the pump. The traditional refinery margins run approzimately $0.22 per gallon of refined gasoline but the margins, for example, in California – as reported in many places – are $0.66 per gallon. Wonder why your gas bill is so high? The extra $0.44 per gallon YOU ARE PAYING is going directly to the obscene profits realized by the oil companies. The market is tight and they know it so they can boost the margins quite easily since a lack of competition gives you, the motorist, no alternative.
By Lisa Sanders, CBS.MarketWatch.com
Last Update: 9:51 AM ET July 28, 2004
DALLAS (CBS.MW) -- ConocoPhillips said Wednesday that second-quarter results almost doubled from a year earlier, as refineries ran at 98 percent of capacity in the U.S., nearly doubling earnings from that segment.
Shares fell 4 cents to $76.43 as the company missed analysts' expectations.
Houston-based ConocoPhillips the third largest U.S. integrated oil company behind ExxonMobil and ChevronTexaco, said second-quarter net income climbed to $2.08 billion, or $2.97 a share, from $1.19 billion, or $1.73 a share, in the year-ago period.
Profit from operations came in at $2.01 billion, or $2.88 a share, up from $1.1 billion, or $1.60 a share.
Analysts polled by Thomson First Call expected ConocoPhillips to earn $2.92 a share, on average.
Second-quarter revenue increased to $31.9 billion from $25.6 billion. ConocoPhillips said it generated enough cash during the quarter to invest $1.6 billion in capital projects, pay $296 million in dividends and reduce debt by about $1.5 billion.
"Overall, our operating performance for the quarter was good, but there were opportunities to do better," said Jim Mulva, president and chief executive, in a statement. "Due to unscheduled downtime, we did not realize the full potential of our assets in a high price and high margin environment."
From exploration and production, ConocoPhillips earned $1.35 billion vs. $1.26 billion in the first quarter of 2004 and $1.08 billion in the year-earlier period.
The company attributed the sequential growth in profit to higher crude oil prices, but lower volumes, lower gains from asset sales, higher impairments, and higher operating costs tempered results.
Compared with a year ago, higher crude and natural gas prices outweighed lower volumes, lower benefits from changes in tax law, and higher impairment and dry-hole costs.
Daily production for the quarter averaged 1.56 million barrels of equivalent a day, despite the sale of an asset that yielded 18,000 boe a day and unscheduled downtime at the Britannia field (15,000 boe a day) in the North Sea.
Realized crude prices rose to $34 a barrel from $30.35 a barrel in the first quarter. Natural gas prices averaged $5.36 per thousand cubic feet in the lower 48 U.S. states and $4.43 per mcf worldwide vs. $4.91 mcf and $4.43 mcf, respectively, in the first quarter.
Refining and marketing brought in $818 million against $464 million in the previous quarter and $321 million in the second quarter of 2003.
"The increase in second-quarter [refining and marketing] earnings, compared with the first quarter of 2004, was primarily driven by higher U.S. refining margins," the company said in its earnings report. "The company's domestic facilities ran at 98 percent crude oil capacity utilization."
But realized margins were hurt by unplanned downtime at a unit of a Pennsylvania refinery and extended turnaround for a unit of a Louisiana refinery, the company said.
Marketing results were affected in part by unfavorable inventory.
Worldwide, the company's refineries ran at 92 percent of capacity, down from 95 percent in the first quarter.
Earnings from chemicals operations rose $7 million to $46 million compared with the first quarter. A year ago, Conoco earned $12 million from the business.
reprinted without permission of CBS Marketwatch
Comment: The higher refinery margins noted above reflect directly in the price of gasoline at the pump. The traditional refinery margins run approzimately $0.22 per gallon of refined gasoline but the margins, for example, in California – as reported in many places – are $0.66 per gallon. Wonder why your gas bill is so high? The extra $0.44 per gallon YOU ARE PAYING is going directly to the obscene profits realized by the oil companies. The market is tight and they know it so they can boost the margins quite easily since a lack of competition gives you, the motorist, no alternative.