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Gains Swell Kerr-McGee

It earns $2.1 billion in the fourth quarter.
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reported a fourth-quarter profit of $2.1 billion, juiced up by a huge gain from the sale of its North Sea oil and gas operations. On a continuing basis, earnings nearly quadrupled, although they missed Wall Street estimates.

The company earned $2.16 billion, or $18.46 a share, in the quarter, including income from discontinued operations of $1.75 billion, or $14.99 a share, which reflected the divestitures. Earnings from continuing operations were $405.5 million, or $3.47 a share, in the latest quarter, compared with $106.3 million, or 69 cents a share, last year.

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The company reported adjusted after-tax income of $125.7 million, or $1.07 a share, in the quarter. The Thomson First Call consensus estimate was $1.61 a share. Kerr-McGee's fourth-quarter sales rose 27% from a year ago to $1.74 billion, easily beating the $1.26 billion consensus estimate.

Within its major segments, Kerr-McGee's exploration and production operating profit totaled $633.8 million in the fourth quarter, up from $266.5 million a year ago. The improvement reflects asset-sale gains and higher oil and gas sales prices.

The company said its daily oil production from continuing operations averaged 99,400 barrels in the 2005 fourth quarter, compared with 121,900 barrels in the 2004 period. The average realized oil price for the 2005 fourth quarter was $44.57 a barrel, up 46% from a year ago.

Natural gas sales from continuing operations averaged 883 million cubic feet per day for the 2005 fourth quarter, compared with 1,041 million cubic feet in the 2004 fourth quarter. The average realized natural gas price was $7.28 per thousand cubic feet, compared with $5.29 per thousand cubic feet a year ago.