Posted on 10/26/2005 11:34:35 AM PDT by TYVets
ConocoPhillips (NYSE:COP - news), the No. 3 U.S. oil company, on Wednesday reported quarterly profit surged 89 percent, surpassing Wall Street forecasts, driven by record oil prices and sharply higher refining margins.
ConocoPhillips, like other major oil companies, has reaped a windfall from soaring crude oil prices -- which touched a record $70 a barrel in the quarter -- and better refining margins, as powerful hurricanes blew through the Gulf of Mexico, severely disrupting energy operations.
The Houston company's net profit in the third quarter rose to $3.8 billion, or $2.68 a share, compared with $2.01 billion, or $1.43 a share, a year earlier. Shares of ConocoPhillips were up $2.56, or 4.1 percent, at $65 on the New York Stock Exchange. "A decent set of numbers from ConocoPhillips, but without the U.S. refining blowout which the market may have by now been anticipating," Credit Suisse First Boston analysts said in a research note.
Profit at its refining and marketing operations rose to $1.39 billion from $708 million a year earlier, but were hit by outages at three Gulf Coast refineries.
Marketing earnings also fell sharply, largely because domestic wholesale and retail prices did not increase as rapidly as gasoline and diesel spot prices.
That was above the average profit forecast of $2.46 a share, according to analysts polled by Reuters Estimates.
Total revenue also jumped to $49.7 billion in the quarter from $34.7 billion a year earlier.
Oil and gas production averaged 1.79 million barrels of oil equivalent per day in the quarter, including the impact of its investment in Russian oil company LUKOIL. Excluding LUKOIL, production rose to 1.52 million barrels a day, boosted by fewer maintenance-related disruptions in Alaska and Norway, and greater output from Australia, Venezuela and Indonesia.
The company said it expects production in the fourth quarter to increase and daily production for the year to average about the same as last year, excluding LUKOIL.
The company said its Lake Charles refinery in Louisiana was expected to return to normal operations by next week, while its Alliance refinery will begin partial operation in December and return to full operation early next year.
ConocoPhillips' shares have risen more than 21 percent in the third quarter, outperforming the broader Standard & Poor's integrated oil index, which rose 13.6 percent in the same period.
hey, when your cost of production stays the same, but you can raise the price of your end product without bound - what do you expect.
and these are the same companies given "incentives" to develop new refineries in the energy bill.
slap a windfall profits tax on them, and use the proceeds to subsidize startup companies in new energy technologies - that's the only way you are ever going to get any innovation and new developments and discoveries in the energy sector. established companies are just going to milk the current game for all they can get.
Gosh. Imagine that. Oil company profits up. I'd never have thought it possible.
How are the federal government's oil profits doing?
An extra 682 million dollars to hire lawyers for their federal suit against The State of Oklahoma.
Good. Love to see companies be profitable.
Do you realize what you are saying? Penalize them for making a "profit"? Do you have any idea how much of that money will go back into building up the rigs and refineries that have been damaged and destroyed in the GOM? You and Hillary on on the same page. http://www.freerepublic.com/focus/f-news/1509583/posts
The oil companies exist to make a profit and grow their companies. They are not there to get gas in your tank at $1.00/gal, nor are they there to fund environmental wackos' pet projects
Wow. Their pfofit margin is 7.75% What a ripoff......
So, if they don't want anything to do with the government or environmental groups, they'll stop donating to politicians and environmentalists, right?
They can't have it both ways.
That's been one of the ugly little secrets. It costs exactly the same to extract oil as it did 5 years ago. Diesel is cheaper to produce than gas, but it's more expensive at the pump. This is probably true everywhere, but in Washington state oil companies do zone pricing where the more affluent parts of town are charged more at the pump. In Spokane you can see over a 20 cent difference in price with zone pricing. Sweet gig...
Could you explain that number for us?
Comparison of profit from quarter to quarter is an indicator of whether or not you have improved, but the most meaningful measure is 'return on investment'. The public gets upset and politicians take advantage of MSM reports of high profits compared to last year, etc. But, if the return on investment is three percent this year compared to one percent last year, then neither return is very good even though it is a 200% increase. Few of us would be satisfied with a three percent return on our personal investments.
Oil is from the mining industry; gasoline from the secondary industry; the stuff dribbling into your gas tank while the numbers flash by on the face of the pump is tertiary. If we want to tax the primary industries, let's go ahead, but it will be spread throughout the secondary and tertiary industries and reduce the economy in a leveraged way.
If your profit margin is 10%, and you sell the same amount of a product but the price doubles, then your profits double. Your margin is unchanged at 10% but you get 10% of twice as much money. This is exactly what has happened in the oil industry. It says NOTHING about gouging. Windfall profits? Perhaps. Should these companies be penalized for making good investment decisions? They sure were penalized back in 1998 when oil fell to $8.00 a barrel. Taxing the "oil companies" doesn't hurt the "oil companies." It hurts YOUR retirement plan and every other shareholder who owns shares in these companies. This is simply income redistribution under the name of "windfall profits tax." If you are for that, then you probably would be happier over at DU.
The oil companies love the restrictions. There were allegations on FR a month ago tha thte oil companies were backing the environmentalists to stop refinery construction. By limiting the number of refineries, you restrict supply. When supply is restricted, you get a demand-based increase in price. The oil companies make higher profits without increasing production. Since refineries are expensive, and the existing ones are essentially paid for, the construction of new refineries will be very expensive and oil companies can adjust their prices and production to drop the price of gas temprarily to make new refineries unprofitable. Or they can block new refinery construction by backing environmental lawsuits. THey get to look 'green' in the process and they get to block the competition. The oil companies ahve us by the b@lls and they know it.
$49.7 billion in revenue, $3.8 billion in profit
3.8/49.7 = 7.65%
You certainly got to be kidding. Besides, that was already tried before. In the Seventies.
Carter "malaise" (reprise), anyone?
Go Conoco!
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