Earnings Jump at Conoco, Occidental

Conoco's first-quarter revenue totals $54.9 billion, compared with $41.3 billion last year.
By Chuck Marvin ,

Energy titans

ConocoPhillips

(COP) - Get Report

and

Occidental Petroleum

(OXY) - Get Report

both reported Thursday that they generated big earnings gains in the first quarter of 2008.

Conoco said its net income in the quarter rose 17%. However, it warned that production in the company's exploration and production segment will likely be lower in the second quarter due to downtime for scheduled maintenance.

Earnings rose to $4.14 billion, or $2.62 a share, from $3.45 billion, or $2.12 a share, for the same quarter in 2007. Revenue totaled $54.9 billion, compared with $41.3 billion in the first quarter last year. According to a survey conducted by Thomson Financial, analysts were expecting earnings of $2.42 a share.

Operating income from Conoco's E&P segment in the first quarter was $2.89 billion, up from $2.61 billion a year ago. The increase was primarily due to the climb in energy prices.

"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," said Conoco CEO Jim Mulva. "Our upstream business produced 2.25 million barrels of oil equivalent per day, including our estimated shares of Lukoil's production, and we benefited from higher commodity prices."

Conoco's refining and marketing income was $520 million, down from $1.1 billion during the same period last year.

"Despite a modest increase in the global market crack from the previous quarter, realized refining margins were also lower due to the adverse impact of certain domestic regional gasoline and distillate differentials, as well secondary product prices, mainly for natural gas liquids and fuel oil," the company said in a press release.

The worldwide refinery utilization rate was 89%.

Conoco spent $3.5 billion on capital expenditures, paid $2.5 billion to repurchase common stock and paid out $700 million in dividends in the recent quarter.

Shares of Conoco were recently trading 1.8% lower at $82.96.

Conoco is the first major integrated firm to report earnings for the first quarter.

BP

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and

Royal Dutch Shell

(RDS.A)

will report their results on Tuesday.

Exxon Mobil

(XOM) - Get Report

is scheduled to reveal its results on May 1, and

Chevron

(CVX) - Get Report

will issue its earnings the next day.

Total

(TOT) - Get Report

will report earnings on May 5.

Meanwhile, Occidental Petroleum announced that its first-quarter earnings soared 52% on increased production rates and higher commodity prices, setting a new earnings record for the company.

Occidental earned $1.85 billion, or $2.23 a share, vs. $1.2 billion, or $1.43 a share, in the same quarter of 2007. Analysts were expecting it to earn $1.98 a share, according to Thomson Financial.

Operating income from Occidental's oil and gas segment was $2.9 billion in the quarter, up from $1.8 billion last year. According to a press release, the increase was mostly due to the activation of production from the Dolphin natural gas project in Qatar, in which the company has a 24.5% working interest.

Daily oil and gas production averaged 607,000 barrels of oil equivalent compared with 560,000 BOE per day in the year-ago quarter. The company achieved a realized worldwide crude oil price of $86.75 a barrel, compared with $51.67 a barrel a year ago. Its average realized natural gas price was $8.15 per thousand cubic feet, up from $6.38 per thousand cubic feet in the first quarter of 2007.

Capital spending rose to $868 million from $780 million in the previous year.

Shares of Occidental were recently down 2.2% at $82.67.

Occidental is the first major independent E&P company to report earnings for the quarter.

Apache

(APA) - Get Report

and

Chesapeake

(CHK) - Get Report

will release their results on May 1.

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