Occidental Petroleum’s earnings rose 50% and its revenue was up 26%, Exxon Mobil saw increases of 41% in profit and 32% in revenue, and Royal Dutch Shell says its earnings doubled and revenue rose 36%.
By Ronald D. White, Los Angeles Times
October 28, 2011
With energy prices high, most oil companies are once again seeing profits rise like an old-style gusher.
Occidental Petroleum Corp., Exxon Mobil Corp. and Royal Dutch Shell on Thursday reported healthy gains in earnings and revenue despite production problems in Libya and other oil-rich areas.
“This is probably the biggest third quarter for the industry since 2008, the year that oil prices peaked,” said Phil Weiss, an energy analyst with Argus Research in New York.
Consumer advocates reacted with anger, saying oil companies are hurting the economy by keeping gasoline prices up as they export record amounts of fuel to other countries.
“Oil companies make too much money during boom times and even during recessionary times because they have market power,” said Mark Cooper, director of research for the Consumer Federation of America. “Prices should be falling for refined products, and they really aren’t because they are exporting rather than lowering the price here for consumers.”
The oil industry was expecting to get hammered again during earnings week, particularly by consumer groups inflamed at the effects of the high energy costs on consumers at a time of low income growth and high unemployment. To counter some of that criticism, the American Petroleum Institute rolled out a study pitching that Americans were profiting along with the industry.
“In 2010, the oil and natural gas industry directly contributed over $470 billion to the U.S. economy in spending, wages and dividends,” said Kyle Isakower, vice president of regulatory and economic policy for the institute. “The dividends alone totaled about $35 billion and went to stockholders of these publicly traded companies,” most of whom were individual investors or their pension and retirement funds.
The trade group also pushed back against the notion of raising taxes on oil and natural gas companies because those costs would be borne by middle-class people saving for retirement rather than corporate officers and directors, who own less than 3% of industry shares.
At Occidental Petroleum, third-quarter earnings jumped nearly 50% to $1.77 billion, or $2.17 per share, compared with $1.19 billion, or $1.46 per share, a year earlier, the Westwood company said Thursday. That surpassed Wall Street expectations of $1.97 a share, according to FactSet. Revenue increased 26% to $6 billion.
Occidental benefited, in part, from record domestic production that helped offset losses in North Africa.
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