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

Irving, TX-based ExxonMobil, the world’s largest integrated oilcompany, reported yesterday that its earnings were its strongest inhistory, reporting $4.15 billion, or $1.18 a share, handily beatingthe Wall Street First Call/Thomson financial consensus estimate of$1.07 for the second quarter. Profits for the same period lastyear 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 timelast year. First Call/Thomson analysts had predicted the SanFrancisco-based company’s earnings would rise to $1.74 a share.

While the news was good earnings-wise, it did nothing for thetwo companies’ stocks yesterday. Shares of ExxonMobil lost 1/16 andstood at 77 3/16. Chevron’s stock posted no change, and stood at 773/8 at close. Most analysts yesterday said that the lukewarmresponse from investors is based on declining oil and natural gasprices, which will lead to lower company profits through the restof the year.

ExxonMobil, which benefited most from high crude oil prices, alsosaw its earnings rise as natural gas prices soared. Chairman LeeRaymond said during an analyst conference call that the second-quarterearnings reflected “not only historically high crude oil and naturalgas prices, but also the fact that the merger is on track and synergycapture is well under way.” ExxonMobil was formed last year when Exxoncompleted its acquisition of Mobil (see Daily GPI, May 28, 1999).

Exploration and production activities spurred most of Chevron’searnings growth, said CEO Dave O’ Reilly, with most of the profitfrom E&P activities outside of the United States.

“Although all of our businesses are making strides in improvingprofitability, the company’s outstanding financial performance thisyear primarily reflected the strength of our exploration andproducing operations,” Reilly said in a statement. More than 90% ofthe earnings improvement came from E&P, and worldwide,Chevron’s oil and gas production rose 2% from a year ago.

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