THE ASSOCIATED PRESS
HOUSTON – Exxon Mobil Corp. today posted the largest annual profit by a U.S. company — US$40.6 billion — as the world’s largest publicly traded oil company benefited from historic crude prices at year’s end.
Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, besting its own mark of $10.71 billion in the fourth quarter of 2005.
The previous record for annual profit was $39.5 billion, which Exxon Mobil reported for 2006.
The eye-popping results weren’t a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50 per cent higher than a year ago.
In fact, Chevron, the second-largest U.S. oil company, also posted near-record profits today.
Crude oil prices reached an all-time trading high of $100.09 a barrel on Jan. 3 but have fallen about 10 per cent since.
The Exxon Mobil record profit for the October-December period amounted to $2.13 a share versus $1.76 a share in 2006. Year-ago net income was $10.25 billion.
Also extraordinary was Exxon Mobil’s revenue, which rose 30 per cent in the fourth quarter to $116.6 billion from $90 billion a year ago.
For the year, sales rose to $404.5 billion — the most ever for the Irving, Tex.-based company — from the $377.64 billion it posted in 2006.
In a statement, Exxon Mobil chairman Rex Tillerson said the company continued to meet the world’s energy needs through its ``globally diverse resource base.”
“Our long-term investment program, in projects often far from major consuming nations, continued to provide resources essential to the increasingly interdependent global energy supply network,” Tillerson said.
Exxon Mobil produces about three per cent of the world’s oil.
Its shares rose $1.45, or 1.7 per cent, to $87.85 in premarket trading.
Meantime, Chevron Corp. said today its profit rose 29.2 per cent in the fourth quarter, beating expectations, as surging prices for crude oil offset weak results from its refining business.
The oil company posted earnings of US$4.88 billion, or $2.32 per share, from $3.77 billion, or $1.74 per share, a year earlier. Revenue rose 29 per cent to $61.41 billion from $47.75 billion.
Analysts polled by Thomson Financial expected a profit of $2.26 per share, on average.
Profits from Chevron’s upstream division — which includes exploration and production of oil and gas — rose 66 per cent. However, downstream operations, which includes refining marketing and transportation of energy products, fell 79 per cent. Its chemical operations also posted a profit decline.
Chief executive Dave O’Reilly said the “significant increase in the price of crude oil” was responsible for the gains, though downstream profits were “off sharply.”
As crude prices touched new highs in the fourth quarter, refiners were hurt by those surging costs as well as weaker demand for refined products like gasoline. Unplanned maintenance operations also hurt downstream results. Chevron shares rose $1.75, or 2.1 per cent, to $85 in premarket trading.