Big Oil doesn't get much bigger than ExxonMobil
That's pretty big.
Speaking of profits, this was another banner quarter for Exxon. Sales were up 19.5% in the fourth quarter as strong earnings from the upstream exploration and production business (fueled by higher crude oil and natural gas prices) offset sluggishness in the downstream refinery business. Excluding various special items, net income rose 23% and diluted earnings per share were up 27% for the quarter.
Upstream earnings growth led the way this quarter, with earnings here up 44% as the company counterbalanced slight production shrinkage with much higher oil and gas prices. Total production was reported down about 1% on an oil-equivalent basis, but would have been up 2% without the impact of Hurricanes Katrina and Rita, as well as excluding certain divestments.
In the downstream business, higher refining margins couldn't completely offset lower throughput. Earnings for the unit were up just 2% for the quarter, though earnings from U.S. operations were up a gaudy 32%. Chemicals continued to have a rough go of it, with earnings excluding special items falling by one third from last year's fourth quarter.
As big as Exxon is, there's still room for more. The company has just started to really get its liquefied natural gas (LNG) business going and, though it's heavily dependent upon Qatar, an acquisition of someone like BG Group
I don't think Exxon is too expensive today, though I'd be tempted to wait for an inevitable short-term slide in oil prices before buying the stock. There are all sorts of high-quality plays in the energy space, though, ranging from ExxonMobil to Occidental Petroleum
For more energy Foolishness pumped from our archives:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).