Sparks fly as ExxonMobil profit tops 10 billion dollars

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Agence France Presse

NEW YORK, NY — Surging oil prices helped drive quarterly profits for US energy giant ExxonMobil to 10.36 billion dollars, the latest in a string of mammoth earnings reports that have drawn fire for the industry.

The second-quarter profit was up 36 percent from a year ago and approached the company’s all-time record profit of 10.71 billion dollars at the end of last year, the biggest for any company.

Stoked by skyrocketing crude-oil prices, ExxonMobil’s net profit in the quarter to June came to 1.72 dollars per share. That handily beat Wall Street forecasts for an earnings figure of 1.64 dollars.

Total revenues in the three months rose 11.8 percent from the same quarter of 2005 to 99 billion dollars.

In Congress, Democratic lawmakers said the sky-high profits reflected misplaced policies by the administration of President George W. Bush and his vice president, Dick Cheney, who are both former oil executives.

“Americans are paying near-record gas prices, oil companies are reaping billions in profits, but the response from the Oil Men in the White House and the Republicans in Congress has been billions for Big Oil and a backhand to the American people,” Senate Democratic leader Harry Reid said.

The soaring profits of ExxonMobil and other oil groups have generated fierce criticism about the industry profiting from consumer misery, prompting some US lawmakers to call for a “windfall” profits tax.

The oil industry has countered by saying its profit margins are lower than many other sectors, and that much of the earnings are reinvested in new production.

ExxonMobil said it continued its “active investment program” in the second quarter, spending 4.9 billion dollars on capital and exploration projects. It also distributed 7.9 billion dollars to shareholders in the second quarter through dividends and share purchases.

ConocoPhillips, the number three US oil and gas firm, on Wednesday said its second-quarter net profit jumped 65 percent from a year ago to 5.2 billion dollars, buoyed by record petroleum prices.

Chevron, the second-largest US oil group, was to report its profit on Friday.

Globally, Anglo-Dutch energy group Royal Dutch Shell has reported a net profit of 6.314 billion dollars. Britain’s BP said earlier this week profits rose 22 percent to 6.118 billion dollars.

BP used to stand for British Petroleum, now it just stands for Bloated Profits,” US Representative Ed Markey said after the BP release.

On Thursday, Markey added, “While American families get tipped upside down and have their savings shaken out of their pockets at the gas pump, the Bush-Cheney team devises even more ways to line Big Oil’s pockets.”

The California-based Foundation for Taxpayer and Consumer Rights said sky-high fuel prices had nothing to do with oft-cited factors such as Middle East unrest or instability in Nigeria.

“Refining profits at this level are pure greed and the real explanation for outrageous prices at the pump,” said the FTCR’s Judy Dugan.

Kimberly DuBord, analyst at the research firm, said meanwhile that ExxonMobil and other energy firms remain a good investment.

“The three largest oil and gas producers in the world generated profits of nearly 23 billion dollars in the second quarter,” she said, noting that ExxonMobil is now generating one billion dollars each day in revenues.

“The profit growth of the supermajors is tremendous and the interim results continue to exceed expectations,” she said.

ExxonMobil shares faded after early gains and closed down 0.2 percent at 66.47 dollars.

Consumer Watchdog
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