Exxon Mobil: Another Earnings Gusher

The energy giant's quarterly profit again hit the $10 billion mark

Exxon Mobil (XOM) raked in profits and hiked spending on production during the third quarter, as oil prices soared for much of the period.

The Irving (Tex.) oil major said Oct. 26 that it had third quarter net income of $10.49 billion, or $1.77 per share, up 6% from $9.920 billion or $1.58 per share in the third quarter of 2005.

Third quarter 2005 net income included a special gain of $1.620 billion related to the restructuring of Exxon's interest in the Dutch gas transportation business. Excluding that special item, Exxon's 2006 quarter improved by 26% compared to the year ago quarter.

After the news, investors bid up Exxon's stock 1.4% to $72.03 in New York Stock Exchange trading Thursday after touching a 52-week high of $72.17 earlier in the session.

While light, sweet crude oil prices have fallen in recent weeks to $61.68 a barrel on Oct. 26, they remained above $70 per barrel during much of the third quarter. Investors had worried about geopolitics and a range of possible supply disruptions such as hurricanes. Even now that many fears have subsided prices remain much higher than they had been in the 1990s, when they had languished under $30 a barrel.

The recent fears didn't hurt Exxon.

"Higher crude oil and natural gas realizations and improved marketing and chemical margins were partly offset by lower refining margins," chairman Rex W. Tillerson said in a press release Oct. 26.

His company put some profits toward finding more oil; its spending on capital and exploration projects was $5.1 billion, an increase of 15% versus 2005. But Exxon's spending had gained 20% to $14.8 billion during the first nine months of the year compared to the same period of 2005.

Exxon also cut down its shares outstanding by distributing $8.9 billion to shareholders in the third quarter through dividends and share purchases, which amounted to $2.1 billion more than in 2005.