DALLAS – Exxon Mobil Corp. saw fourth-quarter earnings jump 63 percent as it benefited from higher prices for crude oil and natural gas.
Exxon Mobil, the world’s largest publicly traded oil company, said Thursday that it also set a record for earnings in one year, $21.51 billion, nearly double its profit for all of 2002.
In the October-December quarter, Exxon Mobil earned $6.65 billion, or $1.01 per share compared to $4.09 billion, or 60 cents per share, a year earlier.
Excluding $2.23 billion from settlement of a dispute with the Internal Revenue Service and other one-time gains and losses, Exxon Mobil said it earned operating profit of $4.42 billion, or 68 cents per share, compared to $3.79 billion, or 56 cents per share a year ago.
That easily beat the forecast of analysts surveyed by Thomson First Call, who had expected earnings of 58 cents per share.
Revenue rose to $65.95 billion from $56.21 billion.
Exxon Mobil shares rose 66 cents, or 1.6 percent, to $41.47 in trading Thursday on the New York Stock Exchange.
Analysts said they expected Exxon Mobil to have a great fourth quarter because of high oil and gas prices. They said the results were even better than expected partly because Exxon Mobil’s chemicals business, long stuck in the doldrums, posted a $400 million increase in profit.
Exxon Mobil stepped up its capital spending, including exploration, in the fourth quarter as part of a long-term strategy to boost production by drilling in West Africa, the Gulf of Mexico and elsewhere around the world.
Patrick Mulva, the company’s director of investor relations, said capital spending in 2004 would remain around $15 billion.
”It’s very important for us to invest in our base, a base that is highly profitable,” Mulva said. ”These investments are very high-return projects for us.”
For all 2003, Exxon Mobil earned a record $21.51 billion, or $3.23 per share, compared to $11.46 billion, or $1.68 per share in 2002. Excluding what the company considered one-time gains, the profit would have been $17.03 billion, on revenue of $246.74 billion, up from $204.51 billion sales in 2002.
The company ended the year with $10.6 billion cash on hand, a spokesman said.
The news of record earnings at Exxon Mobil comes as U.S. motorists face rising prices at the gasoline pumps. Retail prices have climbed 14 cents per gallon in the past five weeks to about $1.62 for a gallon of self-serve regular, according to the Lundberg Survey of 8,000 service stations.
Tyson Slocum, an energy researcher for the consumer group Public Citizen, said the huge profits indicate a handful of oil companies hold too much power, including the five that control about half the nation’s refining capacity and 60 percent of its gasoline sales. He said the government should force merged oil companies – Exxon bought Mobil in 1999 – to divest more of their assets.
”The company is doing what a company should be doing, which is maximizing return to its shareholders,” Slocum said of Exxon Mobil. ”The problem is when you merge fully integrated oil companies with only minimal requirements for divestiture, it creates fertile ground for these companies to have huge market power.”
Fadel Gheit, an analyst with Oppenheimer & Co., said Exxon Mobil profited from the rise in oil to more than $30 per barrel and higher natural gas prices but wasn’t responsible for the run-up.
”Oil companies have absolutely no control over the price of oil. It’s a commodity price set by OPEC (Organization of Petroleum Exporting Countries), politics and Mother Nature,” Gheit said.
He argued that if oil companies could control prices, ”How come they didn’t do something in 1998, when oil prices were $12 a barrel?”Gheit predicted that oil and natural gas prices, which have moved higher since in the new year, would assure ”another very strong quarter” for Exxon Mobil in the January-March period.
As impressive as Exxon Mobil’s fourth-quarter profit was, the gain could be more than wiped out by a federal judge’s ruling Wednesday in a lawsuit stemming from the 1989 wreck of the Exxon Valdez oil tanker. The judge ordered Exxon Mobil to pay $6.75 billion in punitive damages and interest to 32,000 fishermen, Alaska natives and others harmed by the oil spill.
Exxon Mobil vowed another appeal. Mulva declined to say whether the company has set aside money to pay if it eventually loses the case.
”We believe we’ve more than met our obligations there,” Mulva said of the Alaska spill. ”We spent over $3.5 billion in total in Valdez on compensation and a clean-up operation.”