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Daily Telegraph: Exxon profits shoot up 42pc to world record of $36bn

By Roland Gribben (Filed: 31/01/2006)
Exxon Mobil got the oil companies' profit season underway in spectacular fashion yesterday by announcing a 42pc jump in full-year net income to $36.1billion (£20.3billion).
The world's biggest oil and gas business set a new world record in corporate profits on the back of surging prices and attracted more criticism from American motorists protesting about the price of gasoline and environmental groups pressing for more investment in alternative fuels.
In global terms Exxon has effectively emerged as the world's 49th biggest “economy” with profits in excess of the gross national product of 125 of the 184 countries figuring in World Bank statistics.
At the pre-tax level its ranking is even higher. Gross profits were up by 44pc to $59.4billion before the tax authorities around the world creamed off $23.3billion. Net profits in the final three months set another quarterly record with income up 27pc to $10.7billion.
The better-than-expected performance set a new benchmark for the industry and provided a boost for Wall Street as oil prices edged higher despite favourable indicators. Opec ministers were resisting pressure from Iran to cut output while militants in the Nigerian delta released four Shell workers held hostage for 19 days.
A reconstructed Shell, the world's second biggest energy group, will set a UK profits record on Thursday with full-year net earnings of around $23billion, marginally ahead of the $22billion expected from BP next week.
Oil companies have been on the defensive since the price explosion started to fuel the surge in profits. They have responded with share buybacks, higher dividends, substantial increases in investment and greater emphasis on the search for more environmentally friendly fuels.
Exxon's total sales grew 24pc to $370billion last year, while cash flow, including $6billion from asset sales, grew to $54billion. The group paid $23billion to shareholders in buybacks and dividends, while capital spending rose 56pc to $23.2billion.
Upstream earnings were up $6billion to $22.7billion but oil production slipped 3.6pc, with higher output in West Africa, the North Sea and North America more than offset by the slide in the contribution from mature fields and the impact of hurricanes Katrina and Rita on the flow of oil from the Gulf of Mexico.
Fourth-quarter net income was equivalent to $1.71 a share or $1.65 after excluding special gains.

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