Hess Corp. said Wednesday that first-quarter net income dropped 41 percent when compared with a year-ago quarter that included a $310 million gain from asset sales.
The company also paid higher production costs and struggled to generate profits in its marketing and trading businesses.
The New York-based petroleum company reported earnings of $545 million, or $1.60 per share, for the first three months of the year. That compares with $929 million, or $2.74 per share, in a year-ago period that included the sale of Hess' stake in natural gas producing assets in the United Kingdom.
Revenue fell by 7.3 percent in the period to $9.75 billion.
The results beat analyst expectations of $1.54 per share on revenue of $9.42 billion, according to FactSet. Shares rose by 72 cents, or 1.3 percent, to $55.76 in premarket trading.
Hess' marketing business, which provides electricity, natural gas and fuel oil to commercial and industrial customers on the East Coast, earned $22 million in the quarter, down from $68 million in the year-ago period. Its trading business, which invests in oil and natural gas futures contracts, posted a first-quarter loss of $5 million compared with a profit of $19 million in the same period last year.
The company's production business sold oil at $100.50 per barrel, about 9 percent higher than the same period last year. But after including the impact of company investments tied to the price of oil, Hess said its effective sales price was more like $89.92 per barrel, which was only 3 percent higher than a year ago. Meanwhile, it sold natural gas liquids for $59.53 per barrel, down 6.2 percent from last year, and natural gas was sold for $6.23 per 1,000 cubic feet, up 6.7 percent.
Oil and natural gas production was flat in the quarter at 397,000 barrels per day while costs increased 12.6 percent in the quarter to $1.65 billion.
Hess said its refineries narrowed a first-quarter loss to $6 million from a $48 million loss in the same period of 2011.