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ExxonMobil, Chevron Beat Wall Street Estimates

ExxonMobil, Chevron Beat Wall Street Estimates

Better than expected profits lifted ExxonMobil and Chevron to more than double their second-quarter earnings of a year ago, as they reaped the benefit of surging oil and natural gas prices.

Irving, TX-based ExxonMobil, the world's largest integrated oil company, reported last week that its earnings were its strongest in history, reporting $4.15 billion, or $1.18 a share, handily beating the Wall Street First Call/Thomson financial consensus estimate of $1.07 for the second quarter. Profits for the same period last year were $1.86 billion, or 53 cents a share.

Meanwhile, the world's third largest oil company, Chevron, reported its second quarter earnings had risen to $1.14 billion, or $1.75 a share, up from $484 million, or 73 cents for the same time last year. First Call/Thomson analysts had predicted the San Francisco-based company's earnings would rise to $1.74 a share.

While the news was good earnings-wise, it did nothing for the two companies' stocks, with Exxon's falling slightly the day earnings were released while Chevron's posted no change. Most analysts said that the lukewarm response from investors is based on declining oil and natural gas prices, which will lead to lower company profits through the rest of the year.

ExxonMobil, which benefited most from high crude oil prices, also saw its earnings rise as natural gas prices soared. Chairman Lee Raymond said during an analyst conference call that the second-quarter earnings reflected "not only historically high crude oil and natural gas prices, but also the fact that the merger is on track and synergy capture is well under way." ExxonMobil was formed last year when Exxon completed its acquisition of Mobil (see NGI, May 31, 1999).

Exploration and production activities spurred most of Chevron's earnings growth, said CEO Dave O' Reilly, with most of the profit from E&P activities outside of the United States.

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