Exxon net jumps 41% to $10.3bn on oil, refining boost

Exxon Mobil Corp’s profit rose 41% in the third quarter, as gains in crude oil prices and higher refining margins boosted results while production disappointed. Oil companies around the world benefited in the third quarter from a jump in oil prices. Crude futures traded in New York averaged about $90 per barrel in the third quarter, up 18% from a year-ago, and Brent crude rose soared 48%. Exxon is spending heavily to increase its shale gas production, especially in North America. Last year, it closed a deal for gas producer XTO Energy, and the oil company has steadily been purchasing acreage in shale fields like the Marcellus in the Eastern US. In the first nine months of this year, Exxon spent a record $26.7bn. The company realized better prices for natural gas in the third quarter, but hefty supplies have kept natural gas markets in North America depressed and trading at a deep discount to crude and natural gas liquids. Exxon, the world’s largest publicly traded oil company, reported a profit of $10.33bn, or $2.13 per share, up from $7.35bn, or $1.44 per share a year earlier. Analysts on average had expected a profit of $2.12 per share, according to data from Thomson Reuters I/B/E/S.

ShellEnergy giant Royal Dutch Shell said yesterday net profits doubled to $6.98bn (€4.98bn) between June and September as revenues rose by a third thanks to higher oil prices. The profit after tax figure for the third quarter compared with net income of $3.46bn during the equivalent period of 2010, the Anglo-Dutch group said in a statement. “Our third quarter results were higher than year-ago levels, driven by higher oil prices and Shell’s performance,” said Royal Dutch Shell chief executive Peter Voser. “Our profits pay for Shell’s substantial investments in new energy projects, to ensure low-cost, reliable energy supplies for our customers and to create value for our shareholders,” he added in the company statement. Group revenue jumped 36% to $123.4bn in the third quarter from a year earlier. Excluding changes to the value of its energy inventories, Shell said that profit soared to $7.0bn in the third quarter, beating analysts’ consensus forecast of $6.60bn according to a poll by Dow Jones Newswires.

Procter & Gamble US consumer products giant Procter & Gamble said yesterday that profit fell two% in its latest quarter, under pressure from higher commodity costs. The maker of Crest toothpaste, Braun shavers and other global brands reported fiscal first-quarter net earnings of $3.02bn, down from $3.08 in the July-September period in 2010. Earnings per share rose one% to $1.03, in line with analyst expectations. Net sales rose nine% to $21.92bn, better than the market forecast of $21.55bn. The company said its gross margin was squeezed mainly due to higher commodity costs. But Bob McDonald, P&G chairman, president and chief executive, said the first quarter was a “good start” to the fiscal year.

Bristol-MyersBristol-Myers Squibb Co reported better-than-expected quarterly results, fueled by strong sales of drugs for cancer, diabetes and schizophrenia and demand for its new Yervoy melanoma drug. Excluding special items, the company earned 61¢ per share. Analysts on average had expected 58¢ per share, according to Thomson Reuters I/B/E/S. Global sales rose 11% to $5.35bn, above Wall Street expectations of $5.3bn. The drugmaker said it expects full-year 2011 earnings of $2.25 to $2.30 per share, raising the lower end of its earlier forecast by 5 cents.

SantanderThe eurozone’s biggest bank Santander said it expected bad loans in Spain to keep on growing as Spaniards, blighted by unemployment and heavy mortgage debt, fall into arrears on payments. Bad loans as a percentage of total lending are likely to hit a ratio of up to 5.8% in the second half of next year, he said. Santander had a bad loan ratio of 5.15% at end-September, below August’s nationwide level of 7.2%. The lender reported a 13% drop in nine month net profit to €5.3bn ($7.3bn), missing a €5.5bn Reuters polled forecast, due to a hit to cover mis-selling of UK insurance policies taken in the second quarter.

DaimlerDaimler reported weaker than expected third-quarter operating profit as the economic downturn hit sales of its luxury cars in Western Europe. Earnings before interest and tax (EBIT) dropped 19% to €1.97bn ($2.7bn) in the three months through the end of September, less than the average analyst estimate of 2.21bn in a Reuters poll. Car sales growth has been shrinking in Europe, with Germany the only major market in the region to expand in September, and the boom in China that has bolstered German car makers in recent quarters has tempered to a milder pace for now. Daimler affirmed its outlook for 2011, saying it saw full-year EBIT up very significantly from 2010, with revenues of significantly more than 100bn euros, but warned that the economic environment was becoming more gloomy.

TechnipFrench oil services group Technip shrugged off global economic uncertainty yesterday as it unveiled forecast-beating quarterly results and painted a rosy picture for an industry boosted by higher spending among oil companies. The builder of oil rigs and refineries confirmed its full-year forecast for sales growth of at least 7% to €6.5bn-€6.7bn ($9bn-$9.3bn), but raised the revenue target of its fast-growing underwater business to 2.7bn. Technip posted a recurring operating profit of €180.9mn for the third quarter against 155.7mn in the year-ago period. Sales rose 15.6% to 1.7bn spurred by the construction of the Jubail refinery in Saudi Arabia, and subsea projects in Angola, Egypt and Brazil.

EniItalian oil and gas group Eni posted a 7% rise in its underlying net profit in the third quarter to beat market expectations as strong oil prices offset disruption of production in Libya. In a statement yesterday, Eni said adjusted net profit in the third quarter was €1.79bn ($2.474bn), above a Reuters poll of eight analysts that had forecast an average of €1.485bn. Eni said it expected full-year oil and gas production to be around 10% lower than the previous year due to the Libyan shutdown, based on Brent oil at an average price of $111 per barrel for the year. Eni, the biggest foreign oil producer in Libya, said it expects production in the African country to return to pre-crisis levels in about 12 months.

AstraZenecaGeneric competition and pricing pressures weighed on AstraZeneca’s sales in the third quarter, ahead of a key challenge to its top-selling cholesterol drug Crestor in the US marketplace. A weaker dollar provided a prop to Britain’s second-biggest drugmaker, with sales at the reported level up 4% at $8.21bn, while in local currencies they fell 2%. The result was slightly better than expected. Analysts had, on average, forecast sales of $8.16bn, according to Thomson Reuters I/B/E/S. A one-off gain from the $1.8bn sale of dental and surgical unit Astra Tech to Dentsply was excluded from core results, which saw pretax profit flat at $3.08bn in the quarter, equivalent to EPS up 14% at $1.71.

SharpElectronics maker Sharp said yesterday it fell into the red in the six months to September, hurt by a strong yen, the global economic slowdown and production losses from Japan’s March natural disasters. The Osaka-based company also cut sales and operating profit forecasts for the full year to March 2012, citing the yen’s rise and fears of a parts supply shortage in the wake of massive floods in Thailand. Sharp reported a net loss of ¥39.8bn ($524mn) in the April-September fiscal first half, reversing a year-earlier net profit of €14.3bn. Operating profit fell 22.8% to €33.6bn as sales shrank 12.6% to €1.31tn due to drops in the price of television sets with liquid crystal displays, and of solar cells and electronic devices.

LufthansaDeutsche Lufthansa slashed its plans to expand capacity next year, signalling dim prospects for a recovery of the air travel industry. “The outlook for the world economy has become much gloomier over the course of the year,” Europe’s biggest airline by market value said yesterday as it published weaker than expected third-quarter results. Lufthansa already cut its 2011 outlook last month, saying it no longer expected to improve on last year’s operating profit as economic uncertainties stacked up and its passenger airlines unit had a weaker than expected August. Lufthansa’s third-quarter operating profit fell to €575mn ($794.6mn) from €783mn, compared with the €584mn average analyst estimates in a Reuters poll.

BoeingStrong demand for commercial and military aircraft lifted quarterly earnings at Boeing Co, making the builder of the new 787 Dreamliner the latest big-ticket manufacturer to ease fears about global economic conditions. The results and a higher 2011 profit forecast sent Boeing shares 5% higher. The stock also gained on news of the first commercial flight of Boeing’s high-profile, carbon-composite Dreamliner. Boeing, which competes with EADS unit Airbus, said third-quarter profit rose to $1.1bn, or $1.46 per share, from $837mn, or $1.12 per share, a year earlier. The average Wall Street earnings forecast was $1.10 per share, according to Thomson Reuters I/B/E/S. For the full year, Boeing raised its earnings per share guidance to a range of $4.30 to $4.40, “reflecting strong core performance.” Its previous forecast was $3.90 to $4.10. The company, however, narrowed its 2011 revenue forecast to between $68bn and $70bn, from $68bn to $71bn previously.

Emaar Dubai’s Emaar Properties , builder of the world’s tallest tower, reported a 34% drop in third-quarter net profit yesterday as it was weighed down by the emirate’s battered property market. However, the developer’s earnings marginally beat an average analyst forecast for a 36% drop in profits, as recurring income from its malls and hotels business grew. The UAE’s largest developer by market value made a net profit of 406mn dirhams ($110.5mn), compared with 612.3mn in the same period last year, it said in a statement on Dubai’s bourse website.

Volkswagen Volkswagen posted a forecast-beating 45% rise in third-quarter operating profit, driven by emerging markets and strong demand for VW and Audi vehicles, but warned Europe’s debt crisis would weigh on demand for cars in Western Europe. Volkswagen’s third-quarter operating profit rose 45.7% to €2.89bn ($4bn), above the €2.61bn forecast in a Reuters poll. Its nine-month operating profit got a boost from derivatives used in the planned merger with Porsche, but Volkswagen did not say how much that of that impact came in the third quarter. Analysts cheered the results for holding up so well in the third quarter, traditionally the auto industry’s weakest. Volkswagen’s performance stood in sharp contrast to peers like France’s PSA Peugeot Citroen, which earlier this week was forced to announce 6,000 job cuts because of a slowdown in demand in Europe. For Volkswagen, which makes Bugatti, Lamborghini, Audi and VW cars, vehicle deliveries rose 14% in the third quarter, with deliveries up 19% in Germany and 13% in the rest of the world.