ExxonMobil sets annual profit record: $40.6B

HOUSTON -- ExxonMobil xom on Friday posted the largest annual profit by a U.S. company — $40.6 billion — as the world's largest publicly traded oil company benefited from historic crude prices at year's end.

Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, besting its own mark of $10.71 billion in the fourth quarter of 2005.

The previous record for annual profit was $39.5 billion, which ExxonMobil reported for 2006.

The eye-popping results weren't a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50% higher than a year ago.

Crude prices reached an all-time trading high of $100.09 on Jan. 3 but have fallen about 10% since.

The record profit for the October-December period amounted to $2.13 a share vs. $1.76 a share in 2006. Year-ago net income was $10.25 billion.

Also extraordinary was ExxonMobil's revenue, which rose 30% in the fourth quarter to $116.6 billion.

For the year, sales rose to $404.5 billion — the most ever for the company — from the $377.64 billion it posted in 2006.

In a statement, ExxonMobil Chairman Rex Tillerson said the company continued to meet the world's energy needs through its "globally diverse resource base."

"Our long-term investment program, in projects often far from major consuming nations, continued to provide resources essential to the increasingly interdependent global energy supply network," Tillerson said.

ExxonMobil produces about 3% of the world's oil.

Higher commodity prices in the quarter were clearly evident from earnings at ExxonMobil's exploration and production arm, known as upstream. Income rose 32% to $8.2 billion from $6.2 billion a year ago.

On an oil-equivalent basis, production increased nearly 1% from the fourth quarter 2006. Excluding the expropriation of its Venezuelan assets last year, divestments and other factors, production rose nearly 3%.

Refining and marketing, or downstream, earnings were $2.3 billion, up from nearly $2 billion in the year-ago quarter, as improved refining operations offset lower U.S. refining margins.

In the U.S., downstream earnings were off sharply from a year ago — $622 million in the most-recent quarter vs. $945 million in 2006.

Refining margins — the difference between the cost of crude and what the company makes on refined products such as gasoline — have been squeezed in recent months as spiking crude oil prices outpaced price increases in gasoline and other refined products.

Already, ConocoPhillips cop has said record oil prices at the end of 2007 helped it post a 37% increase in fourth-quarter profit, even as it produced less crude and natural gas than a year earlier. Its fourth-quarter net income rose to $4.37 billion versus $3.2 billion a year earlier.

ConocoPhillips is the nation's third-largest integrated oil company behind ExxonMobil and Chevron cvx.

Chevron reporrted separately Friday that its profit rose 29.2% in the fourth quarter, as surging prices for crude oil offset weak results from its refining business. It earned $4.88 billion, or $2.32 a share, from $3.77 billion, or $1.74 a share, a year earlier. Revenue rose 29% to $61.41 billion from $47.75 billion.

On Thursday, Royal Dutch Shell rdsardsb, Europe's largest oil company, reported fourth-quarter profit rose 60% to $8.47 billion on asset sales and higher oil prices. What's more, the Anglo-Dutch company said full-year net profit was a company record $31.3 billion, up 23% from the prior year.