Helped by higher oil prices and a strong performance from its chemical segment, Kerr-McGee ( KMG) said net income increased by 59% in the second quarter, beating analysts' estimates.

The Oklahoma City-based energy company said earnings rose to $110.6 million, or $1.01 a share, up from $69.6 million, or 68 cents a share, in the same period last year.

On an adjusted basis, excluding discontinued operations and the effect of special items, the company had earnings of $119.8 million, or $1.09 a share, compared with $113 million, or $1.07 a share, in the prior year. On this basis, a Thomson First Call analyst survey was expecting the company to earn $1.08 a share in the latest quarter.

Revenue rose to $1.1 billion, up slightly from $1.05 billion a year earlier and above analysts' estimates of $925.3 million.

Kerr-McGee's daily oil production from continuing operations averaged 140,500 barrels in the 2004 second quarter, down 9% from 154,800 barrels a day a year earlier.

Including the effect of the company's hedging program, the per-barrel sales price for oil from continuing operations rose to $26.97 from $25.28 last year.

The company said it expects total oil and gas volumes to increase by more than 25% in the third quarter.

Shares of Kerr-McGee were off 3 cents to $51.99 in early Wednesday trading.

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