Wednesday, July 27, 2011
Dow Jones Newswires
by Tess Stynes & Ryan Dezember
Hess' second-quarter earnings soared 62% thanks to sharply higher oil prices and despite a wider loss for its marketing and refining operations.
Hess' performance in recent quarters has been boosted by high oil prices, as well as improved demand for gasoline and diesel products. However, its marketing and refining business has continued to lag.
Hess reported a profit of $607 million, or $1.78 a share, up from $375 million, or $1.15 a share, a year earlier. Revenue climbed 27% to $9.81 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of $1.94 a share on revenue of $10.08 billion.
Pearce Hammond, an analyst with Houston investment bank Simmons & Co., said that Hess' trading losses as well as those from its refining joint venture with Venezuela's state oil company were "major disappointments." Overall, the results "will likely weigh on the stock today," Hammond wrote in a note to clients.
Shares recently traded 3.13% lower at $70.80.
Earnings at the exploration-and-production segment, which accounts for most of Hess' profit, surged 53% despite lower production. Average prices, excluding hedging impacts, jumped 46% for oil and 6.5% for natural gas.
In the marketing and refining business, losses widened in the refining-and-trading segments, while marketing income strengthened by 65%.
Copyright (c) 2011 Dow Jones & Company, Inc.
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