BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Tuesday, 24 July, 2001, 15:09 GMT 16:09 UK
Exxon profits still rising
Esso petrol station
Almost $10bn in profits may not please consumers
ExxonMobil, the world's largest oil company, has reported a 6% rise in second quarter profits.

The company earned $4.38bn, bringing its half year profit total to a record $9.43bn.

The company, which sells under the brand name Esso in many countries, has continued to enjoy increased revenue from the strength of crude oil prices and has particularly benefited from higher natural gas prices during the second quarter.

The success of the major oil firms depends heavily on the price of their raw materials in the international market place, rather than on the strength of the global economy.

And, while an economic downturn is expected to have a direct impact on energy demand, it has done little to dent Exxon's results so far.

But with both gas and crude oil prices now drifting lower, analysts believed that the recent run of record-breaking results for oil firms could come to an abrupt end.

Worrying outlook?

Crude oil prices, while down from a year ago, are still strong by historic standards, averaging about $28 a barrel during the last quarter.

The first half of 2001 is clearly the peak of the oil industry earnings cycle

Oil industry analyst
The strength of prices for raw materials helped Exxon's exploration and production unit to post $2.85bn in revenue, $85m higher than the same period the previous year.

But analysts have expressed concern about the outlook for the rest of the year.

"The first half of 2001 is clearly the peak of the oil industry earnings cycle for the foreseeable future," said Michael Young, an analyst at Gerard Klauer Mattison.

A weakening oil price has already spurred speculation that the Opec cartel will take emergency action to try and stop further falls.

Chemical downturn

The one sector already feeling the pressure because of the slowdown is Exxon's chemical unit.

Profits at the chemical business shrunk to $142m from $362m the previous year.

Including special charges springing from the merger between Exxon and Mobil in 1999, total profits at the firm slipped 1.5%.

Fears about slipping crude oil prices caused Exxon's share price to fall 1.62% to $41.81 after the first hour of trading in New York.

Search BBC News Online

Advanced search options
Launch console
See also:

18 Apr 01 | Business
Q&A: Should petrol be cheaper?
20 Feb 01 | Business
Exxon loses $500m damages case
24 Jan 01 | Business
Exxon Mobil reaps record profits
13 Feb 01 | Business
Oil firms: Excessive profits?
23 Apr 01 | Business
Exxon Mobil reaps $5bn
12 Mar 01 | Business
Exxon Mobil closes Indonesian fields
04 May 01 | Business
Exxon fined $3.4bn for 'fraud'
08 May 01 | Business
Consumer boycott to 'stop Esso'
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories