ConocoPhillips's Strong Quarter Bodes Well for Other Oil Production Companies

Includes: COP, CVX, XOM
by: Jonathan Liss

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

ConocoPhillips Posts 65% Jump In Quarterly Profit

  • Summary: ConocoPhillips's (NYSE:COP) reported successful second-quarter earnings yesterday to the tune of $3.09 EPS, up from $2.21 a share during the year earlier quarter. Revenue was $47.1 billion, up 13% from $41.8 billion in the year-earlier quarter. ConocoPhillips's earnings suggest that other major American oil producers will also report earnings that outperform consensus estimates. Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) both report earnings in the coming days. ConocoPhillips's earnings come as Americans continue to dig deeper into their own incomes to afford retail gasoline prices that top $3 a gallon on avergae. The company's results, and expected similarly robust profits from Exxon Mobil and Chevron are likely to fuel political anger toward the big oil producers. In response, ConocoPhillips's chairman and ceo James Mulva, said in a statement that the company has an $18 billion capital-spending plan for 2006, a 50% increase from 2005 and triple what it spent three years ago. In another positive, ConocoPhillips said earnings from exploration and production jumped 71% while profits from refining and marketing rose 54%. ConocoPhillips's results beat Wall Street expectations as analysts surveyed by Thomson Financial expected just $2.81 a share. Shares responded by jumping $1.15, or 1.70% in trading yesterday. They picked up another $0.17 after hours.
  • Comment on related stocks/ETFs: For more on ConocoPhillips's recent quarter, read their conference call transcript. For more on earnings expectations across the oil production sector, read Rob Black's recent Energy Stock Report.

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