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  • Imperial Oil misses estimates with 24% drop in Q3 profits 0 comments
    Nov 1, 2010 3:45 PM | about stocks: IMO

    Imperial Oil (TSX, NYSE Amex: IMO), Canada's largest petroleum refiner, posted a 24% drop in its third quarter profits on Monday, driven by lower production volumes, currency effects and pipeline reliability issues, it said.

    For the third quarter, the company recorded net income of C$418 million, or C$0.49 per share, versus profits of C$547 million, or C$0.64 per share, in the same period last year. Results fell just below Thomson Reuters' estimate of C$0.51 per share.

    The company said the lower earnings were on account of planned downtime at Syncrude, the oil sands development in northern Alberta and also the largest oil sands project in the world. The maintenance work cost the company around $90 million through lower upstream volumes.

    The strong Canadian dollar also hit earnings by about $70 million, and third-party pipeline issues cost Imperial around $60 million, the company said.

    Upstream net income in the third quarter decreased 21%  to $348 million, while downstream profits increased by 11% to $69 million, driven by improved operations and sales volumes, the company said.

    The company's total revenues increased slightly by 5% from the third quarter of 2009 to $5.9 billion, due to stronger sales from the downstream and chemical segments.

    Gross oil-equivalent barrels of production averaged 281,000 barrels a day, down from 304,000 barrels a day in the same period last year, as planned maintenance activities at Syncrude and the cyclic nature of production at Cold Lake generated lower volumes.

    During the period, Imperial Oil's exploration expenses more than doubled to support the company's Kearl oil sands project, for which plans reconfigured, costing it more than previously expected.

    The company is also planning an expansion with the Nabiye project, expected to add about 30,000 barrels per day to its Cold Lake production.

    In the third quarter, the company held $51 million in cash at quarter-end, compared with $513 million at the end of 2009.

    Net income for the first nine months of the year was up marginally to $1.4 billion, or $1.65 a share, versus $1.0 billion, or $1.22 a share, for the same period last year.

    Imperial Oil, owned by Texas-based Exxon Mobil, is one of Canada's largest producers of crude oil and natural gas, with a coast-to-coast supply network that includes about 1,850 retail service stations.

    The company was down more than 1% on Monday, trading at $38.38 as of 3:26pm ET on the New York Amex Exchange.

    Disclosure: no position
    Stocks: IMO
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