ConocoPhillips, the third-largest U.S. oil company, reported first-quarter profit below analysts’ estimates because production was hurt by fighting in Libya and extra refinery maintenance.
Production fell 6.9 percent from a year earlier to the equivalent of 1.7 million barrels of oil a day, Houston-based ConocoPhillips said today in a statement. Unplanned downtime in its exploration and production segment, due in part to civil turmoil in Libya, cut earnings by about $100 million, the company said.
Rising crude prices and asset sales boosted net income 44 percent to $3.03 billion, or $2.09 a share, from $2.1 billion, or $1.40, a year earlier.
“Unplanned downtime will come back to haunt you,” said Gianna Bern, president of Brookshire Advisory & Research Inc. in Chicago. “Producers should be putting out as much production as they can in the current environment given crude-oil prices.”
The company’s profits may be reduced by $25 million to $30 million a quarter as long as its Libyan operations remain affected, Chief Financial Officer Jeff Sheets said in a telephone interview.
ConocoPhillips is selling as much as $17 billion in assets by the end of 2012 as it seeks cash to fund share buybacks and growth. Excluding gains related to asset sales, profit was $1.82 a share, 10 cents lower than the average of 18 analyst estimates compiled by Bloomberg.
ConocoPhillips fell $1.38, or 1.7 percent, to $79.83 at 4:15 p.m. in New York Stock Exchange composite trading. The stock had climbed 19 percent this year before today.
ConocoPhillips leads major U.S. oil companies in reporting first-quarter earnings. Exxon Mobil Corp., the largest U.S. oil company, plans to release results tomorrow, and Chevron Corp., the second-biggest company, will issue a first-quarter report on April 29.
President Barack Obama has called on Congress to act on proposals to eliminate “unwarranted” tax breaks for the oil and gas industry and use the savings to fund clean energy programs. Obama’s fiscal 2012 budget plan, unveiled Feb. 14, proposes eliminating oil and gas tax breaks estimated at $46.2 billion over 10 years.
“To take resources away from companies that are already highly taxed and who are using their profits predominantly to reinvest in the business and create future energy supplies, is just the wrong thing from an energy policy perspective,” Sheets said.
Revenue in the first quarter surged 27 percent from a year earlier to $58.2 billion, the company said. Oil futures in New York averaged $94.60 a barrel in the first quarter, 20 percent higher than a year earlier, as unrest in the Middle East and North Africa raised supply concerns.
ConocoPhillips said maintenance downtime at some facilities in its U.S. refining business also trimmed profit by about $50 million.
In addition to the asset-sale program, ConocoPhillips this year completed the sale of its 20 percent stake in OAO Lukoil, Russia’s largest non-state oil producer. Proceeds from the sale of most of that stake and other assets in 2010 totaled $15.4 billion, ConocoPhillips said Jan. 26.
Sheets said the company plans $5 billion to $10 billion in asset sales over 2011 and 2012. ConocoPhillips said 2011 share buybacks will be $5 billion to $10 billion.
The company in March said output may slump in coming years as some production assets are sold, though the slump may be followed by long-term growth of 2 percent to 3 percent.