ConocoPhillips 1Q profit up 17 pct. on higher oil prices

HOUSTON — ConocoPhillips, the third-largest U.S. oil company, said Thursday its first quarter profit rose almost 17 percent as record high oil prices offset disruptions that hurt earnings from its refining operations.

The Houston-based company said net income rose to $4.14 billion, or $2.62 a share, for the January-March period, from $3.55 billion, or $2.12 a share, in the year-ago quarter.

On average, Wall Street analysts surveyed by Thomson Financial expected earnings per share of $2.42.

ConocoPhillips said revenue rose to $54.9 billion from $41.3 billion a year ago.

As expected, soaring crude prices in the first three months of the year gave ConocoPhillips a big lift. Crude prices have neared a record $120 a barrel in recent trading sessions.

"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," Jim Mulva, ConocoPhillips' chairman and chief executive, said in a statement.

The company said net income from its exploration and production arm rose nearly 24 percent to $2.89 billion in the first quarter from a year ago, as higher commodity prices offset lower volumes and higher taxes.

Daily production in the most-recent quarter averaged 1.79 million barrels of oil equivalent a day, down from 2.02 million barrels a year ago. The company attributed the decline to the expropriation of its Venezuelan oil projects last year and its exit from Dubai, as well as normal field decline and unplanned downtime in the continental U.S.

Production results include ConocoPhillips' Canadian Syncrude operations but not its Russian Lukoil business.

Earnings fell sharply on the refining and marketing side, to $502 million from $1.14 billion a year ago — a decline ConocoPhillips said earlier this month was not unexpected.

The root of the problem was refining margins, which were squeezed by higher crude prices. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

Lower volumes also hurt, as ConocoPhillips said it encountered unplanned downtime at its U.S. Gulf Coast refineries.

Despite the higher earnings, ConocoPhillips shares fell $1.59 to $82.89 Thursday.

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