Archive for April, 2011

Exxon’s profit soars 69 percent, tops Street

Thursday, April 28th, 2011 | Finance News

HOUSTON (Reuters) – Exxon Mobil Corp's quarterly profit rose a better-than-expected 69 percent as the world's largest publicly traded oil company benefited from higher crude prices and improved earnings in its chemical and refining businesses.

In the first quarter, the average U.S. oil price was $95 per barrel, about 20 percent higher than a year earlier, a factor that has lifted earnings at most oil companies.

Since then, prices have climbed above $100 per barrel in a rally fueled by improved world demand for fuel and unrest in the Middle East and North Africa.

"It looks like chemical was really strong," Phil Weiss, oil analyst at Argus Research, said. "And production came in on the higher side relative to my expectations, especially gas."

Exxon shares were likely not responding to the earnings beat because it was driven by chemicals, which is not the company's primary business, Weiss said.

Shares of Exxon edged slightly lower in premarket trading.

Low natural gas prices and an improvement in global economies have boosted results for chemical companies, while refiners are profited from higher fuel demand.

The Irving, Texas, company reported a first-quarter profit of $10.65 billion, or $2.14 per share, up from $6.3 billion, or $1.33 per share, a year earlier.

Analysts on average had expected Exxon to report a first-quarter profit of $2.07 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 26 percent to $114 billion.

Oil and gas output rose 10 percent to 4.82 million barrels oil equivalent per day.

Profit in Exxon's chemicals unit rose 21 percent to $1.5 billion. Refining profit grew to $1.1 billion, up from $37 million a year earlier.

Shares of Exxon fell slightly to $87.56 in premarket trade from a New York Stock Exchange close of $87.78.

(Reporting by Anna Driver in Houston; editing by John Wallace, Dave Zimmerman)

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Instant View: GDP growth 1.8 percent, weekly jobless rises

Thursday, April 28th, 2011 | Finance News

NEW YORK (Reuters) – U.S. GDP growth fell to 1.8 percent annual rate in the first quarter of 2011 after a 3.1 percent fourth quarter rise, the Commerce Department said on Thursday. Economists had expected a 2 percent growth pace.

The personal consumption expenditures price index rose at a 3.8 percent rate, its fastest pace since the third quarter of 2008, after increasing 1.7 percent in the fourth quarter.

The core index, which excludes food and energy costs, accelerated to a 1.5 percent rate, the fastest since the fourth quarter of 2009, from 0.4 percent in the fourth quarter.

In another report, new weekly claims for U.S. jobless benefits jumped to 429,000 in the April 23 week, from 404,000 the prior week.

ANALYSTS COMMENTS:

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FLORIDA:

GDP: "It came in pretty within expectations. They were a few surprises with consumption and business investments which came in a bit stronger than expected. You are seeing a largely weather story in January and February and a rebound in March.

There are some concerns going forward. We think gasoline prices will continue to dampen the recovery. We are looking at a moderate recovery here. It will still some time before we see the economy fully recover.

With the rise in the deflator and PCE, I don't think it's a start of a trend. Given the general outlook we are still the economy restrained by energy, tight credit and weak housing. There is not a lot of underlying inflationary pressure."

JOBLESS CLAIMS: "There is a lack of job creation. If the job creation machine is weak, this could be a signal that smaller firms are curtailing their hirings just as it seemed they were hiring again.

As for the March payroll report, we'll probably see it well under 200,000, maybe 150,000 or less. We still have a lot of ground to make up."

STEPHEN STANLEY, CHIEF ECONOMIST, PIERPONT SECURITIES, STAMFORD, CONNNECTICUT:

GDP : "It's very much in line with consensus. The underlying components were a little better than what I had expected. The biggest factor was weather. It hurt consumption and construction. Energy also hurt consumption as well. Higher gasoline prices took a bigger bite out of people's budget."

JOBLESS: "It's certainly disappointing. The number has risen three weeks in a row and that's a bit worrisome. The Labor Department is attributing it to the Easter holiday, but we'll see. I think there is upward pressure from these auto plants having rolling shutdowns. It might be worth 15,000 to 30,000 a week in claims. If this were to stay significantly above 400,000, i would be worried."

BOB ANDRES, CHIEF INVESTMENT STRATEGIST & ECONOMIST OF MERION WEALTH PARTNERS IN BERWYN, PENNSYLVANIA:

"I'm surprised (GDP) wasn't lower. You had a number of different things -- Bernanke mentioned the harsh winter weather, it's a little bit of a cop out but it certainly played a part. The trade gap widened and ... capital goods orders were down in the first quarter. On top of that you had higher commodity prices.

"Coming in at 1.8, to get to where Fed's forecast is, you're going to need some robust growth in (quarters) 2, 3 and 4.

"In my mind, the Fed's forecast and the Street's forecast are more than likely a little too optimistic going forward."

WILLIAM LARKIN, PORTFOLIO MANAGER WITH CABOT MONEY MANAGEMENT IN SALEM, MASSACHUSETTS:

"Jobless claims popped back above 400,000 again, and that's been a psychological barrier. We had been on a nice trend with claims, but now we're finding resistance, which calls into questions the jobs recovery.

"GDP was a little on the light side, though there were positives and negatives in the report. But with the amount of injection of capital into the economy, you'd hope that we would be able to get above 2.0 percent growth. In the short-term this is bad for stocks and good for bonds."

RICHARD BRYANT, HEAD OF TREASURY TRADING, MF GLOBAL SECURITIES, NEW YORK:

"The big surprise was that jobless claims were a little bit higher than people were looking for, a little bit higher than expectations, so the Treasury market is retaining the bid that it has demonstrated since yesterday afternoon. This data certainly supports the bid. GDP had no major surprises, the headline was a little but weaker than expectations."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, UNIT OF THOMSON REUTERS:

"This is a significant slowing from a Q4 pace of 3.1 percent though inflationary pressures look firmer, with core PCE prices marginally ahead of consensus at 1.5 percent and up from a record low of 0.4 percent in Q4. The core PCE data is not high enough to cause inflationary alarm but the overall PCE price index at 3.8 percent, lifted by food and energy, was considerably stronger, the highest since Q3 2008."

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High oil prices stoke ExxonMobil bumper profits

Thursday, April 28th, 2011 | Finance News

NEW YORK (AFP) – ExxonMobil on Thursday reported bumper quarterly profits of nearly $11 billion as the energy giant benefited from a politically sensitive surge in oil prices.

Net income hit $10.65 billion in the first quarter, a leap of 69 percent from the year-ago period, the company said in a statement.

Earnings per share were up 61 percent at $2.14.

"ExxonMobil's earnings reflect continued leadership in operational performance during a period of strong commodity prices," Rex Tillerson, the company's chairman, said in the statement.

The strong earnings increase from a year ago reflected "higher crude oil and natural gas realizations, increased refining margins and record chemical performance," he said.

Total revenue climbed to $114.0 billion in the quarter, compared with $90.25 billion in the 2010 first quarter.

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