The gamecock. (Columbia, S.C.) 1908-2006, October 28, 2005, Page 5, Image 5
Exxon Mobil profits, sales soar; Royal Dutch Shell not far behind
Oil companys
3rd-quarter earnings
prompt tax request
Steve Quinn
THE ASSOCIATED PRESS
DALLAS — Exxon Mobil
Corp. rewrote the corporate
record books Thursday as the
oil company’s third-quarter
earnings soared to almost $10
billion and it became the first
public company ever with
quarterly sales topping $100
billion. Anglo-Dutch
competitor Royal Dutch Shell
PLC wasn’t far behind, posting
a profit of $9 billion for the
quarter.
Those results led Democrats
in Congress to demand a new
windfall profits tax. “Big oil
behemoths are making out like
bandits, while the average
American family is getting
killed by high gas prices, and
soon-to-be record heating oil
prices,” Sen. Chuck Schumer,
D-N.Y., said in a statement.
But, Energy Secretary Samuel
Bodman said President Bush
opposes such a move and is
instead considering a wide
range of proposals to help
cushion consumers, including
the creation of an emergency
reserve of gasoline and other
refined products.
Thursday’s outsized earnings
are a result of surging oil and
natural gas prices that pushed
pump prices to record territory
after Hurricane Katrina. They
come on the heels of similar
eye-popping gains reported this
week by BP PLC,
ConocoPhillips Inc. and
Marathon Oil Corp. Chevron
Corp. reports its earnings on
Friday.
Some Republican members
of Congress called on the
industry to invest in ways that
will increase production so that
micRS • commucD PRom i
Miers failed that test,” said Sen.
Edward M. Kennedy, D-Mass.,
“In effect, she was denied
due process by members of her
own party,” said Sen. John
Warner, a Virginia
Republican. And former GOP
Sen. Dan Coats, whom the
White House assigned to assist
her win confirmation, said
outside groups and pundits
and “perhaps even some
senators” had rushed to
judgment.
Bush, beset by poor poll
ratings, an unpopular war in
Iraq, high energy prices and the
possibility of indictments of
White House officials, offered
no hint about his thinking on a
new nominee. He pledged to
make an appointment in a
“timely manner.”
While White House aides
had assembled a lengthy list of
contenders prior to Bush’s
selection of Miers less than a
month ago, most if not all of
them were prominent
conservative jurists who could
be expected to trigger a sharp
clash with Democrats. Other,
less contentious contenders
could come from outside what
Bush calls the “judicial
monastery,” possibly a current
or former senator who could
easily win confirmation on a
Bipartisan vote.
Sen. John Cornyn, a former
Texas Supreme Court judge,
sidestepped when asked about
his own availability, demurring
without closing the door on an
appointment. “If the president
calls me, obviously I’ll answer
the phone or go see him if he
invites me to come to the
White House, but that hasn’t
happened and I doubt it will
happen,” he said.
Whatever the next choice,
many Republicans seemed
eager to place Miers’
nomination and the intra-party
brawl it sparked behind them as
quickly as possible. “Let’s move
Mark Lorenz / Lawrence Eagle- Tribune
Brian Alliette of Methuen, Mass., pumps $50 dollars of gas on Thursday, barely filling half his truck’s tank, at the Exxon station on Route
114 in Lawrence, Mass. Exxon Mobil Corp., the largest publicly traded oil company in the world said third-quarter profit surged, buoyed
by higher crude-oil and natural-gas prices, even as the period’s hurricanes hampered production.
consumers get a break at the
pumps or when they pay their
heating bills. But analysts said
telling the industry how to
spend its money was unfair, if
not futile.
“Exxon is a good corporate
citizen but it does not work for
the welfare of the country,” said
oil analyst Fadel Gheit at
Oppenheimer & Co. in
New York.
Exxon Chairman and Chief
Executive Lee R. Raymond did
not mention of the record
results in the company’s
earnings release. Instead, he
noted that the world’s largest
publicly traded oil company
“acted responsibly in pricing at
our company operated service
stations, and we also
encouraged our independent
retailers and distributors to do
the same.”
Henry Hubble, Exxon’s vice
president of investor relations,
did note on a conference call
the company’s record profit,
which rose 75 percent in the
quarter to $9.92 billion from
$5.68 billion a year ago. He
said the gains “reflect the strong
commodity prices and our
fundamental business model
that is disciplined,
straightforward and focused on
generating value while
managing risk.”
The previous oil-industry
earnings record was Exxon’s
2004 fourth-quarter profit of
$8.42 billion. Third-quarter
revenue jumped to $100.72
billion from $76.38 billion in
the prior-year period.
To piit its performance into
perspective, Exxon’s revenue for
the three-month period was
greater than the annual gross
domestic product of some of
the largest oil producing
nations, including the United
Arab Emirates and Kuwait —
even though it lost considerable
production because of a string
of hurricanes that battered the
U.S. Gulf coast.
Robert Kaufmann, a
professor at Boston University’s
Center for Energy and
Environmental Studies, says
production will return to pre
hurricane levels and hurricane
related losses will disappear in
future earnings reports, but
profits will remain high.
“A lot of the capacity was
being built when oil was
trading at $20 to $30 a barrel
range, so by definition those
fields are much more
profitable,” he said. “Nobody
should be surprised by this.”
Despite the profit surge,
Exxon’s performance fell short
of analysts’ expectations and its
shares fell 60 cents to $55.60 in
trading Thursday on the New
York Stock Exchange, while
U.S.-traded Class A shares of
Shell rose $ 1.15, or 1.9 percent, *
to $60.65 on the NYSE.
With oil futures above $60 a
barrel for much of the third
quarter, Exxon’s profits from
petroleum exploration and
production increased by $1.8
billion to $5.7 billion. Soaring
prices for gasoline, diesel and
jet fuel lifted refining and
marketing profits by $727
million to $2.13 billion.
However, income at the
company’s chemicals unit
declined by $537 million to
on,” said Sen. Trent Lott of
Mississippi. “In a month, who
will remember the name
Harriet Miers?”
Ironically for conservatives
the withdrawal means an
extended tenure for Justice
Sandra Day O’Connor, whose
vote has been decisive over the
years on 5-4 rulings that upheld
abortion rights, sustained
affirmative action and limited
the application of the death
penalty.
Bush issued a statement
saying the 60-year-old Miers
would remain as White House
counsel and praising “her
extraordinary legal experience, ■
her character, and her
conservative judicial
philosophy.”
Senate Majority. Leader Bill
Frist told reporters, “I expect a
nominee quickly ... within
days,” and held out the
possibility of confirmation
hearings before Christmas.
The White House worked to
depict the collapse of Miers’
nomination as a simple matter
_1_ _I J:_
executive privilege.
However, in an interview
two weeks ago, Republican
Arlen Specter, chairman of the
Judiciary Committee, had said
when asked about possible
withdrawal: “I think that would
be a sign of incredible
weakness.”
White House spokesman
Scott McClellan said Miers
informed Bush of her decision
Wednesday night.
In the Senate, Frist had been
in periodic contact with
officials at the White House on
Wednesday, offering
increasingly dour assessments
of Miers’ chances for success.
Frist’s spokesman, Bob
Stevenson, said the senator
talked to White House Chief of
Staff Andrew Card during the
evening to offer a “frank
assessment of her prospects in
the committee and the Senate
as a whole.”
'f
Charles Dharapak / The Associated Press
White House counsel Harriet Miers smiles and waves as she walks
into the White House on Thursday in Washington.
In fact, her nomination never
seemed to take hold in the
Senate, given the surprise that
greeted her appointment, her
lack of experience as a judge,
the sustained criticism from
conservatives in the face of
repeated endorsements from
Bush.
“However nice, helpful,
prompt and tidy she is, Harriet
Miers isn’t qualified to play a
Supreme Court justice on 'The
West Wing,’ let alone to be a
real one,” conservative
columnist Ann Coulter said in
one of the more cutting
comments.
Additionally, Miers failed to
generate enthusiasm for her
nomination in private meetings
with individual senators,
according to many lawmakers.
Some senators, speaking on
condition of anonymity
because of the private nature of
the sessions, described her as
soft-spoken and reticent and
difficult to draw out on the
b
type of issues likely to come
before the court.
There were fresh problems at
mid-week, including the
disclosure of a speech Miers
delivered in 1993 that touched
on the issues of abortion and
voluntary school prayer. “The
underlying theme in most of
these cases is the insistence of
more self-determination. And
the more I think about these
issues, the more self
determination makes the most
sense,” she said, remarks that
sparked fresh criticism from
conservative groups.
Specter had released a letter
stating he intended to question
Miers about constitutional
issues in the war on terror,
including the administrations
policy of open-ended detention
of suspects at Guantanamo Bay,
Cuba. He also said he wanted
assurances that Miers would
rule without showing “special
deference” to Bush if
confirmed.
$472 million, a reflection of the
higher prices for raw materials.
Exxon said hurricanes
slashed U.S. production
volumes by 5 percent from a
year ago, while global daily
production slipped to 2.45
million barrels of oil equivalent
from 2.51 million barrels. By
the end of the year, it will cost
the- company about $100
million after taxes, the
company estimated.
At Shell, third-quarter net
income grew 68 percent to
$9.03 billion from $5.37
billion a year earlier. Revenue
at the , London-based
company, which has extensive
operations in the United
States, rose 8 percent to
$76.44 billion.
’ “We are capturing the
benefits of high oil and gas
prices and refining margins,”
Shell Chief Financial Officer
Peter Voser said, referring to the
profit margin on each barrel of
crude that is refined into
gasoline, diesel and jet fuel.
onens prorits rrom
exploration and production
increased by $2.6 billion to $5
billion in spite of an 11 percent
decline in oil and natural-gas
output. Its refining and
marketing profit climbed by
$201 million to $1.7 billion. Its
chemicals business saw profits
decline by $251 million to
$321 million.
- Shell said hurricane damage
would cost it about $350
million, although much of the
expense would be covered by
insurance.
Also on Thursday, Marathon
said third-quarter profit more
than tripled to $770 million,
up from $222 million a year
earlier. Most of the profit came
from its oil and natural-gas
production unit. However, the
results fell short of Wall Streets
aggressive estimates and
Marathon’s stock slumped
$3.80, or 6.2 percent, to
$57.28 on the NYSE.
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