NEW YORK – No. 3 U.S. oil company ConocoPhillips (COP) on Wednesday reported quarterly profit surged 51 percent, beating Wall Street forecasts, driven by record energy prices and strong refining and marketing results.
The Houston company also sounded an upbeat note on its outlook for the year and said it expected stronger oil and gas production in the second half. Full-year output is expected to rise 3 percent from last year, excluding the impact of its investment in Russian oil giant Lukoil (search).
Net income was $3.14 billion, or $2.21 a share in the second quarter, compared to $2.08 billion, or $1.48 a share, in the year-earlier quarter. The results were well above the average analysts' estimate of $2 a share, according to Reuters Estimates.
Surprisingly strong performance at its U.S. refining and marketing operations pushed results above forecasts, Credit Suisse First Boston analysts said in a research note.
"A strong quarter from refining and marketing will likely rekindle interest in ConocoPhillips as a U.S. refining and marketing play," CSFB analysts wrote.
The company produced 1.76 million barrels of oil equivalent per day in the second quarter, including the impact of its Lukoil investment.
Total revenue jumped to $42.6 billion from $31.9 billion a year earlier.
ConocoPhillips shares were up 54 cents $61.96 on the New York Stock Exchange (search).
Oil prices have been on a record-breaking spree over the past year, pushed up by growing demand from Asia and tight spare production capacity.
Two other major U.S. oil producers, Amerada Hess Corp. (AHC) and Kerr-McGee Corp. (KMG) also reported higher quarterly profits on the back of soaring oil prices.
Despite a rise in profit, Amerada disappointed Wall Street as poor refining results and its hedging program hurt the oil prices it was able to book. Kerr-McGee, however, posted a more than three-fold rise in earnings.