Energy majors -- and even the minors -- continue to hit home runs.

ExxonMobil

(XOM) - Get Report

stepped up to the plate Thursday with record-breaking profits that raced past Wall Street estimates.

Royal Dutch

( RD) also knocked out a stellar quarter and added a special crowd pleaser by announcing plans to combine with its

Shell

(SC) - Get Report

affiliate and become a single company.

Meanwhile, the much-smaller

Dynegy

(DYN)

-- still rebuilding after a losing gamble on energy trading -- slammed out its best results in recent history while raising the bar for future results.

High commodity prices powered all three.

Industry leader ExxonMobil posted third-quarter operating profit of 96 cents a share that beat the consensus estimate by 9 cents and ranked as the company's highest quarterly earnings ever. Revenue soared 28% to $76.4 billion from a year ago. Operating income jumped an even more impressive 71% to $6.23 billion.

The company enjoyed phenomenal growth in all its major business segments. In the exploration and production division, third-quarter profits surged 45% to $3.93 billion due to higher energy prices. Refining profits rocketed 54% to $1.4 billion despite some weakness in refinery margins. And chemical earnings more than tripled, coming in at a record $1 billion for the quarter.

"Third-quarter earnings, excluding a special item, were a record ... and improved in all business segments," said ExxonMobil Chairman Lee Raymond.

But investors reacted more to oil prices, which fell Thursday to their lowest level in two weeks on an unexpectedly strong jump in inventories. Shares of ExxonMobil, in turn, slid 28 cents to $48.67.

The Urge

Both Royal Dutch and Shell rallied, however, after the closely linked companies finally answered calls from investors to merge. The decision follows Shell's stunning revision in proved reserves early this year -- which raised major questions about corporate governance -- and ends nearly a century of the two companies operating under separate parents.

Currently, the combined unit is 60% owned by Royal Dutch and 40% owned by Shell. Each share of Royal Dutch and Shell will now be worth one share in the combined company if the proposal wins approval. Jeroen van der Veer, who chairs both companies, would serve as CEO.

"This is the end of 60:40; we become one company with one share," Van der Veer said, according to the

Associated Press

. "There is one set of directors, one chief executive, one person who has to take full accountability."

News of the pending merger came as Royal Dutch/Shell reported record quarterly earnings. The company more than doubled its third-quarter profits to $5.4 billion.

Exploration and production earnings jumped 18% to $2.4 billion. Refinery earnings rocketed 77% to $1.56 billion. And the chemicals division saw profits grow by nearly twentyfold, coming in at $577 million.

Still, the company offered some bad news along with the good. Notably, it said that it may need to once again cut its proved reserves even after the dramatic reductions already announced so far.

"I am, of course, disappointed that the more rigorous review and audit process we have put in place has identified potential proved reserves reductions," Van der Veer said. But "I am pleased with the progress we're making."

Investors were cheerful as well, pushing shares of both companies up Thursday morning. Royal Dutch climbed 1.4% to $54.56. Shell rose an even higher 2.5% to $47.96.

Capturing Upside

But Dynegy emerged as a bigger winner. Dynegy's stock jumped 5.4% to $5.05 after the company published third-quarter results and full-year guidance that toppled analyst expectations.

Dynegy posted third-quarter profits of 16 cents a share that beat the consensus estimate by 9 cents. Operating income jumped to $78 million from just $5 million a year ago.

The company attributed a rise in natural gas liquids profits to "sharply" higher energy prices. It also said that power generating results came in similar to last year's despite mild weather.

"This strong operational performance enables us to capture upside when it is available in the market at different points in the overall gas and power demand and pricing cycles," CEO Bruce Williamson said. "The third quarter demonstrates the competitive advantages and upside potential embedded in our energy businesses."