Exxon Mobil Corporation Q2 results
Posted: 1 August 2003
Exxon Mobil Corporation reported second quarter results. Net income
was $4,170 million ($0.62 per share), an increase of $1,530 million
from the second quarter of 2002.
Excluding merger effects and discontinued operations, earnings
increased $1,511 million from the second quarter of 2002. Revenue
for the second quarter of 2003 totaled $57,165 million compared
with $50,804 million in 2002.
Capital and exploration expenditures of $3,831 million in the second
quarter of 2003 were up $438 million compared with last year.
ExxonMobil's Chairman Lee R. Raymond commented as follows:
"Second quarter earnings remained strong and improved in all
parts of the business versus last year. Chemicals earnings were
at their highest level since 1998. Capex continued to grow consistent
with our long-term investment plans.
"Compared with last year's second quarter, ExxonMobil's net
income of $4,170 million was up $1,530 million.
"Upstream earnings were $2,838 million, an increase of $608
million from second quarter 2002 results reflecting higher average
crude and natural gas prices.
"On an oil-equivalent basis, actual production in the second
quarter was flat with increased European gas demand and contributions
from new projects offset by natural field decline and the impacts
of operational outages in the North Sea and West Africa. The majority
of the operational problems were resolved by the end of the second
quarter.
"Excluding the impacts of the national strike in Venezuela
and the second quarter operational outages, total oil and natural
gas producible volumes increased 2% versus the first half of last
year. Plans for long-term capacity increases remain on track as
reflected by higher capital spending.
"Downstream earnings were $1,146 million, an increase of $764
million from last year's second quarter reflecting improved industry-wide
conditions. Margins were particularly strong at the beginning of
the quarter but have since weakened significantly.
"Chemicals earnings of $439 million, were up $170 million
from last year's second quarter. Earnings benefited from higher
worldwide margins early in the quarter and favorable foreign exchange
effects.
"ExxonMobil's net income for the first half of 2003 was $11,210
million, up $6,480 million from the first half of 2002 reflecting
improved results in all areas of the business.
"In the second quarter, ExxonMobil continued its active investment
program, spending $3,831 million on capital and exploration projects,
compared with $3,393 million last year, reflecting continued growth
in upstream spending.
"During the quarter, the corporation acquired 33 million shares
at a gross cost of $1,194 million to offset the dilution associated
with benefit plans and to reduce common stock outstanding. Due to
the strong earnings through the first half of the year and the resulting
significant cash flow, the corporation has increased its rate of
share purchases in July."
Additional comments on earnings for the major operating segments
follow:
Second Quarter 2003 vs. Second Quarter 2002
Upstream earnings were $2,838 million, up $608 million from the
second quarter 2002 reflecting higher crude oil and natural gas
realizations.
Oil-equivalent production was flat versus the second quarter of
last year. Higher European gas demand and contributions from new
projects and work programs were offset by natural field declines
and operational issues in the North Sea and West Africa. Operational
problems were largely resolved by the end of the quarter.
Liquids production of 2,478 kbd (thousands of barrels per day)
decreased from 2,495 kbd in the second quarter of 2002. Higher production
in Nigeria and Canada, and reduced OPEC quota restrictions in Abu
Dhabi, were more than offset by natural field declines in mature
areas and by the operational outages in the North Sea and West Africa.
Second quarter natural gas production increased to 9,259 mcfd (millions
of cubic feet per day), compared with 9,192 mcfd last year. Higher
demand in Europe and contributions from new projects and work programs
more than offset natural field decline in mature areas and the impacts
of operational problems in the North Sea.
Earnings from U.S. upstream operations were $907 million, up $230
million. Non-U.S. upstream earnings of $1,931 million were $378
million higher than last year's second quarter.
Downstream earnings of $1,146 million increased $764 million from
the second quarter of last year reflecting stronger worldwide refining
and marketing margins. Petroleum product sales were 7,800 kbd, 231
kbd higher than last year's second quarter.
U.S. downstream earnings were $419 million, up $185 million. Non-
U.S. downstream earnings of $727 million were $579 million higher
than last year's second quarter.
Chemicals earnings of $439 million were up $170 million from the
same quarter a year ago due to improved margins during the first
part of the period and favorable foreign exchange effects. Prime
product sales of 6,369 kt (thousands of metric tons) were down 333
kt, reflecting lower industry demand.
Corporate and financing expenses of $253 million increased by $31
million mainly due to higher U.S. pension costs.
During the second quarter of 2003, Exxon Mobil Corporation purchased
33 million shares of its common stock for the treasury at a gross
cost of $1,194 million. In addition, from July 1 through July 30,
the corporation purchased 14 million shares for the treasury at
a gross cost of $513 million. These purchases were to offset shares
issued in conjunction with company benefit plans and programs and
to reduce the number of shares outstanding. Shares outstanding were
reduced from 6,679 million at the end of the first quarter of 2003
to 6,652 million at the end of the second quarter. Purchases may
be made in both the open market and through negotiated transactions.
Purchases may be increased, decreased or discontinued at any time
without prior notice.
First Half 2003 vs. First Half 2002
Net income of $11,210 million ($1.67 per share) for the first half
of 2003 increased $6,480 million from the first half of 2002. Excluding
a required accounting change, a special item, merger effects and
discontinued operations, first half 2003 earnings of $8,960 million
($1.33 per share) were $4,178 million higher than 2002. Net income
for the first half 2003 included a $550 million positive impact
for the required adoption of FAS 143 relating to accounting for
asset retirement obligations. First half net income in 2003 also
included a one-time gain of $1,700 million from the transfer of
shares in Ruhrgas AG, a German gas transmission company. First half
net income in 2002 included $90 million of after-tax merger expenses
and $38 million in earnings from discontinued operations.
Upstream earnings, excluding the Ruhrgas gain, of $6,831 million
increased $2,512 million due to higher liquids and natural gas realizations.
Total oil and natural gas producible volumes increased 2% versus
the first half of last year as higher European gas demand and contributions
from new projects and work programs more than offset natural field
decline. Taking into account the effects of the national strike
in Venezuela, and the operational outages in the second quarter,
actual oil-equivalent production was flat.
Liquids production of 2,491 kbd decreased 27 kbd from 2002. Higher
production in Nigeria and Canada, and lower OPEC-driven quota constraints,
were offset by natural field decline and the impact of operational
problems in the North Sea and West Africa.
First half 2003 natural gas production of 10,652 mcfd increased
193 mcfd from 2002. Higher demand in Europe and contributions from
new projects and work programs more than offset natural field decline
and the operational outages in the North Sea.
Earnings from U.S. upstream operations for the first half of 2003
were $2,166 million, an increase of $1,041 million. Earnings outside
the U.S. were $4,665 million, $1,471 million higher than last year.
Downstream earnings of $1,869 million increased by $1,515 million
from a weak first half of 2002 reflecting higher worldwide refining
and marketing margins. Petroleum product sales of 7,830 kbd compared
with 7,622 kbd in the first half of 2002.
U.S. downstream earnings were $593 million, up $345 million. Non-
U.S. downstream earnings of $1,276 million were $1,170 million higher
than last year.
Chemicals earnings of $726 million were up $325 million from the
first half of 2002 due to improved margins and favorable foreign
exchange effects. Prime product sales of 13,260 kt were down 76
kt, reflecting lower demand.
Corporate and financing expenses of $466 million increased by $174
million mainly due to higher U.S. pension costs.
During the first half of 2003, Exxon Mobil Corporation purchased
68 million shares of its common stock for the treasury at a gross
cost of $2,385 million. These purchases were to offset shares issued
in conjunction with company benefit plans and programs and to reduce
the number of shares outstanding. (BUSINESS WIRE)
For more information see www.exxonmobil.com.
Posted by Richard Price,
Editor Pipeline Magazine
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