Updated from 11:24 a.m. EST
fourth-quarter earnings surged 27% to more than $10 billion on higher energy prices and refining profits.
During the fourth quarter, net income was $10.7 billion, or $1.71 a share, compared with $8.4 billion, or $1.30 a share, a year ago. Adjusted for gains, Exxon earned $1.65 a share in the quarter, topping the Thomson First Call consensus by 20 cents.
Exxon's shares added $2.08, or 3.4%, to $63.37 Monday. The stock is up 13% this year and 24% since the start of 2005. High energy prices and the company's steady increase in shareholder buybacks and dividends have contributed to the stock's surge.
"Many in the investing community weren't expecting these earnings," said Henry Hubble, Exxon's vice president of investor relations, in a conference call Monday morning. Hubble was the only company official on the conference call.
Exxon made $36.1 billion for the full year, a 43% improvement over 2004. Both of its quarterly and annual earnings were thought to be the highest for any American public company.
Exxon didn't trumpet its record earnings in its release because, like other energy companies, the oil major has been trying to downplay its record profits amid rising consumer anger over high fuel prices.
also reported stellar earnings last week thanks to skyrocketing commodity prices.
Disruptions in world oil supplies, growing demand in Asia and lower production levels in the Gulf of Mexico have roiled the energy markets, pushing up crude prices 60% in 2005 and 11% this year. Oil was trading at $68.10 a barrel, up 34 cents on Monday.
Commodity prices should remain high through May because of continuing world tensions, falling gasoline stocks and lower capacity rates at the nation's refineries as they undergo seasonal maintenance. Refiners put off their usual repairs after the hurricane reduced gulf supplies. With soaring oil prices come high share prices for energy companies.
"That's going to keep them high through the spring," said Jacques Rousseau, a senior energy analyst at Friedman, Billings, Ramsey. Rousseau, a former Mobil employee who has Exxon shares in his retirement account, has a neutral rating on the stock because he thinks there are better bargains in the sector.
Exxon's record quarterly earnings were the latest in a series of huge profits for the $394 billion company. In the third quarter, Exxon earned a record $9.2 billion based largely on increased natural gas and crude prices and higher refining and marketing margins.
Exploration and production earnings rose 44% to $7.04 billion, despite a 1% drop in production because of hurricane damage. Hurricanes Katrina and Rita slammed into the Gulf Coast last August and shut down much of the region's oil and natural gas production.
Before the hurricanes, Exxon produced 280,000 barrels of oil and gas per day in the Gulf of Mexico. The company's daily output in the fourth quarter was 200,000 barrels, and will likely be 270,000 barrels this year. All of Exxon's refineries returned to full production by November, Hubble said.
Earnings generated from refining rose by $46 million from last year to $2.4 billion. Higher quarterly refining and marketing margins helped offset reduced output from hurricane-damaged refineries.
Profits from the company's chemical segment were down $413 million to $835 million thanks to higher material costs.
Exxon made sure to highlight its efforts to boost production, which critics have contended is not enough to match demand, and pointed to rising output in Russia, Qatar, West Africa and the North Sea. Exxon spent $5.3 billion on capital and expenditure projects in the quarter, and $17.7 billion for the year, a 19% rise. In September, the Sakhalin 1 project in Eastern Russia started production and produced 50,000 barrels a day through 2005. Gas sales were 60 million cubic feet per day.
"There is a great deal of public interest in global energy prices," Exxon Chairman Rex Tillerson said in a statement. "We recognize that consumers worldwide want and need reliable supplies of affordable energy -- to fuel their vehicles, light and heat their homes and run their businesses. Our strong financial results will continue to allow us to make significant, long-term investments required to do our part in meeting the world's energy needs."
The supermajor also gave back some of its record profits to shareholders, laying out $6.8 billion for share buybacks and dividends during the quarter. Still, the amount was the same as the third quarter, and analysts pounced on the figure, questioning why the company didn't increase the figure.
"The buyback is a flexible component of our distribution to shareholders," said Hubble. "I wouldn't read anything into it. It will depend on our cash generation as we go forward."
For the year, the company gave shareholders $23.2 billion, 56% over 2004.