ExxonMobil earnings rise 6%, offset drop in chemicals profits

ExxonMobil Corp. Tuesday reported record second quarter earnings of $4.38 billion, excluding merger effects and special items. That's up $230 million, or 6%, from the second quarter of 2000. Chemicals earnings fell $220 million due to deterioration in margins as higher gas prices drove up feedstock costs while product prices fell.


By the OGJ Online Staff

HOUSTON, July 24 -- ExxonMobil Corp. Tuesday reported record second quarter earnings of $4.38 billion, excluding merger effects and special items. They were up $230 million, or 6%, from the second quarter of 2000.

Revenue for the second quarter was $56.4 billion compared with $55.9 billion in 2000. Capital and exploration expenditures of $2.8 billion in the second quarter were up $410 million, or 17%, compared with $2.4 billion for the same quarter last year and were 13% higher than in the first quarter.

Lee R. Raymond, ExxonMobil chairman, said, "The improvement in earnings reflected higher US natural gas realizations and refining margins, both of which were very strong early in the second quarter but declined significantly as the quarter progressed. The decline in these key earnings drivers along with crude oil prices has continued into the third quarter.

"Upstream volumes were higher, excluding the effect of suspending natural gas production operations in the Aceh province in Indonesia due to security concerns."

The company said chemicals earnings of $317 million included $175 million of net gains on asset management activities. Absent this special item, earnings of $142 million fell $220 million due to a significant deterioration in margins, particularly in the US, as higher natural gas prices drove up feedstock costs while product realizations declined.

Exxon said in the second quarter it bought back 34.8 million shares at a gross cost of $1.5 billion to offset the dilution associated with benefit plans and to reduce common stock outstanding. Also, it announced a two-for-one stock split and an additional 2ยข/share dividend, both with a record date of June 20.

Exxon said its liquids production of 2.53 million b/d increased from 2.51 million in the second quarter of 2000, reflecting higher production in Equatorial Guinea, Nigeria, Kazakhstan, and Canadian heavy oil operations. Worldwide gas production was up about 4%, primarily reflecting higher production in Europe, Australia, Canada, and Qatar.

Excluding merger effects and special items, record first half earnings of $9.4 billion increased $1.93 billion, or 26%, from the first half of last year. Including merger effects and special items, first half net income of $9.46 billion increased $1.45 billion.

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