Earnings: Exxon Mobil | Shell | DaimlerChrysler | Kellog | US Airways |
Oil companies continued to reap the benefits of higher crude prices in the second quarter as Exxon Mobil and Royal Dutch Shell on Thursday reported not just huge profits, but major increases in those earnings as well.
Exxon, the world's largest public oil company, saw net income for the second quarter climb 35 percent to $10.36 billion, a near-record quarterly profit for a publicly traded U.S. company. Shell posted profit of more than $6 billion, a 36 percent gain.
Exxon Mobil Reports Over $10B In Quarterly Profit
NEW YORK (Reuters) - Exxon Mobil Corp. (XOM), the world's largest public oil company, Thursday reported quarterly profit surged 35 percent to top $10 billion, driven by yet another quarter of sharply higher oil prices.
In a surprise move, the company boosted also its capital spending program forecast to $20 billion this year, citing additional exploration and production opportunities.
The world's largest company by market capitalization also said it would ramp up its already hefty stock buyback program to $7 billion in the third quarter.
Helped also by 6 percent growth in oil and gas production and better refining margins, the company's earnings easily beat Wall Street expectations, but revenues fell short of forecasts.
Net income in the second quarter was $10.36 billion, or $1.72 a share, compared to $7.64 billion, or $1.20 a share, in the year earlier quarter.
Analysts on average expected a profit of $1.64 a share, according to Reuters Estimates.
Revenue jumped 12 percent to $99.03 billion, from $88.57 billion a year earlier. That was below analysts' average forecast of $104.26 billion, according to Reuters Estimates.
Exxon, like its peers, is enjoying another in a string of bumper quarters as crude oil prices hover at historically high levels. Oil prices hit a record high of $78.40 a barrel about two weeks ago, driven by anxiety over supplies from the Middle East.
The company's latest results are sure to reignite calls for windfall profit taxes on Big Oil companies, who have come under attack over the past year for posting record profits as consumers struggle with soaring gasoline prices.
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LONDON, (Reuters) - Oil giant Royal Dutch Shell Plc beat forecasts on Thursday to report a 36 percent rise in second-quarter current cost of supply net profit, which strips out changes in inventory values, to $6.3 billion, thanks to high oil prices. Excluding a non-operational charge of $232 million, the result was $6.546 billion, ahead of an average forecast of $6.149 billion from a Reuters poll of 12 analysts, and up from an underlying net profit of $5.171 billion a year earlier.
Shell's production of oil and gas disappointed slightly, averaging 3.253 million barrels of oil equivalent per day (boepd) in the second quarter, compared with an average forecast of 3.315 million boepd and 3.526 million boepd in the same period of 2005.
Shell cut its 2006 output target, saying its production would be around 3.4 million boepd rather than the 3.5-3.6 million boepd earlier envisaged if outages related to civil strife in Nigeria continue.
However, Shell added the caveat that the new target assumed oil prices at $50 - well below current levels.
If prices are above $50, Shell will receive even less oil under its production contracts with some resource holding governments, and so output could be under 3.4 million boepd.
Shareholders will be relieved that Shell has stuck to its 2006 and 2007 capital spending plans, after rival BP Plc was forced to hike its spending plans on Tuesday.
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DaimlerChrysler Profit More Than Doubles
BERLIN - (AP) - DaimlerChrysler AG (DMX) said Thursday that its profit more than doubled in the second quarter as an improvement at its Mercedes unit and other businesses outweighed a slump at Chrysler.
The automaker earned 1.81 billion euros ($2.28 billion) in the April-June period, compared to 737 million euros in the second quarter of 2005.
Sales were little changed at 38.6 billion euros ($48.6 billion) versus 38.4 billion euros in the year-earlier period.
"The earnings improvement was primarily due to the significant increase in operating profit achieved by the Mercedes Car Group," DaimlerChrysler said in a statement.
Its truck business and financial services division also improved their results.
"In total, these increases more than offset the decrease in operating profit recorded by the Chrysler Group," the automaker said.
Analysts had expected profit of about 835 million euros ($1.1 billion), according to Dow Jones Newswires.
However, the analysts polled hadn't foreseen a one-time gain of 800 million euros ($1 billion). DaimlerChrysler said that was the result of a hedging operation related to its stake in European Aeronautic Defense and Space Co.
The company said second-quarter operating profit — a key gauge of underlying profitability — rose 11 percent to 1.86 billion euros ($2.34 billion) from 1.67 billion euros.
Shares in DaimlerChrysler jumped 4.7 percent to 40.70 euros ($51.28) on the Frankfurt stock exchange after the figures were announced.
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CHICAGO (Reuters) - Kellogg Co. (K) Thursday posted higher quarterly profit as sales rose 7 percent, driven by strength in products like Mini Wheats and Kashi cereals and Pop-Tarts pastries.
Kellogg, which also makes Frosted Flakes cereal and Keebler cookies, said profit for the second quarter was $266.5 million, or 67 cents a share, compared with $259 million, or 62 cents a share, a year earlier.
Analysts on average forecast 65 cents a share, according to Reuters Estimates.
Like many food companies, Kellogg has been pressured by higher costs for energy and other commodities. Kellogg has fought back with price increases and cost-cutting measures.
Sales rose 7 percent to $2.77 billion. Excluding currency fluctuations, sales also rose 7 percent. Kellogg said it now sees full-year sales by that measure to be up in the mid-single digits for the year, ahead of its long-term target for growth in the low-single digits.
The company stood by its forecast for full-year net earnings of $2.45 to $2.49 a share. It said it sees its gross margin declining by about 50 basis points for the year, but said the gross margin is expected to increase in the second half of the year.
Kellogg shares are up more than 13 percent for the year, compared with a 6 percent increase for competitor General Mills Inc. (GIS).
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CHICAGO (Reuters) - US Airways Group Inc. (LCC), formed from the September merger of America West Airlinesand US Airways, Thursday said it posted a second quarter profit and expects to post profits for the third quarter and the full year.
The combined airline said its profit amounted to $305 million, or $3.25 per share, compared with a loss of $3 million or 20 cents per share a year earlier at a stand-alone America West Airlines. For accounting purposes, America West is treated as the acquiring company.
The airline said its operating revenuetotaled $3.2 billion.
Excluding special items, the airline said its quarterly profit was $315 million, or $3.35 per share, compared with a $4 million profit, 21 cents per share, a year earlier at the stand-alone America West.
The airlines said the items include $35 million of merger-related transition expenses, which were offset in part by a $7 million gain from interest income earned on certain prior year federal income tax refunds.
US Air said it finished the quarter with $3.2 billion in total cash and investments, of which $2.2 billion was unrestricted.
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Reuters and the Associated Press contributed to this report.
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