Houston – Thanks to soaring oil and gas prices, ConocoPhillips posted a 51 percent surge in fourth-quarter profits Wednesday, providing a glimpse of what is expected to be an earnings-season bonanza for the entire industry.
The Houston-based company’s earnings reached $3.68 billion, or $2.61 per share, compared with $2.43 billion, or $1.72 per share, a year ago in spite of production problems left over from Hurricanes Katrina and Rita. Full-year profits jumped to $13.53 billion, up from $8.13 billion in 2004.
ConocoPhillips is the nation’s third-largest integrated oil company behind Exxon Mobil Corp. and Chevron Corp.
The company reported income from continuing operations of $3.78 billion, or $2.69 per share. On that basis, analysts surveyed by Thomson Financial expected earnings of $2.62 per share.
ConocoPhillips shares fell 94 cents to close at $63.54 on the New York Stock Exchange on a day when stock prices for many in the industry fell in response to declining oil prices. That left its shares on the high end of their 52-week range of $43.95 to $71.48.
Analysts were unconcerned.
“They’re on the right track. They’re doing a good job. Stay tuned,” said Oppenheimer & Co. analyst Fadel Gheit. “As long as we have $60-plus oil, I think they’re all going to do well.”
Oil futures settled at $65.85 per barrel Wednesday, down $1.21 on the New York Mercantile Exchange.
Also Wednesday, New York- based oil and gas producer Amerada-Hess Corp. said fourth- quarter profits nearly doubled on stronger revenue fueled by sharply higher selling prices. Oklahoma City-based oil and gas producer Kerr-McGee Corp. said its fourth-quarter profit skyrocketed on a gain from selling its North Sea energy business.
Howard Weil Inc. analyst Gene Gillespie said oil prices are expected to remain high in 2006 but not go substantially higher, leading to more solid profits for the industry.
In 2005, Nymex oil futures averaged $56.70, an increase of 37 percent from 2004, when they averaged $41.47.
Chevron is to release fourth- quarter and full-year 2005 results Friday, followed by Exxon Mobil on Monday.
ConocoPhillips’ fourth-quarter revenues surged to $50.2 billion from $40.1 billion in the year-earlier quarter. Full-year revenues increased to $183.4 billion from $136.9 billion in 2004.
Exploration and production earnings from continuing operations increased to $2.43 billion from $1.67 billion in the same quarter last year. The company produced 1.9 million barrels of oil equivalent per day, relatively flat year-over-year.
