ConocoPhillips' Q3 net earnings down 14% to US$2.62B due to unexpected production losses in China, Libya, but revenue up 33% US$62.78B
October 26, 2011
– ConocoPhillips said Wednesday its third-quarter profit fell about 14 percent due to unexpected production losses in China and Libya. Conoco has also been selling assets as it reshapes the company.
The Houston oil company reported earnings of $2.62 billion, or $1.91 per share, for the July-September quarter. That compares with $3.06 billion, or $2.05 per share, in the same part of 2010. Excluding special charges, Conoco reported adjusted earnings of $3.45 billion, or $2.52 per share.
Revenue increased 33 percent to $62.78 billion.
Analysts, who usually exclude special charges, expected earnings of $2.16 per share on revenue of $55 billion, according to FactSet.
Conoco has been selling assets to focus on more profitable operations. It expects to complete the transformation next year by splitting into two companies — an exploration and production business and a separate oil refining and pipeline company. Because of the asset sales,
Conoco was expected to produce less oil and natural gas than in the past. But it also dealt with unexpected problems in its exploration and production business.
China forced Conoco to suspend production in the Bohai Bay after discovering an oil spill in June. Conoco operates the field with state-owned partner China National Offshore Oil Corp. Its operations in Libya also were shut down this year as a rebellion swept through the country and ousted leader Moammar Gadhafi.
Overall, Conoco said oil production fell 17 percent to 741,000 barrels per day and natural gas production dropped 4 percent to 4.4 billion cubic feet per day.
Higher oil and gas prices helped make up for those production losses. Conoco said oil prices increased 40 percent to $97.24 per barrel and natural gas prices rose 14 percent to $5.45 per 1,000 cubic feet.
Profits more than doubled at Conoco's refining business to $789 million as the price of gasoline and other fuels rose in the quarter. Conoco said it continues to try to sell its refinery in Trainer, Pa. The facility will close by the end of March if it cannot find a suitor.
The company's chemicals business boosted earnings 49 percent to $197 million.
Shares rose $1.42, about 2 percent, to $72.10 in premarket trading.
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