ConocoPhillips said Wednesday its second quarter profit dropped 18.3 percent but beat expectations. The year-ago quarter benefited from large gains as the company shed assets.
The Houston oil and natural gas company reported earnings of $3.4 billion, or $2.41 per share, for the April-June period. That compares with $4.2 billion, or $2.77 per share, for the same part of 2010 when Conoco reported $2.9 billion in asset sales.
Revenue increased 34 percent to $67 billion.
Analysts had expected earnings of $2.20 per share on revenue of $57.9 billion, according to FactSet.
Conoco has been aggressively shrinking its business, selling assets that haven't been as profitable as others. Earlier this month, the company announced it would follow crosstown rival Marathon Oil and split into two companies: one that focuses on exploration and production, and another that refines oil into gasoline and other fuels.
"We believe our investors will see significant long-term benefit from this repositioning," Jim Mulva, Conoco's Chairman and CEO, said in a statement.
The moves have been cheered by Wall Street, though the asset sales have cut into the company's global oil production business at a time when crude prices have risen. Oil and gas production dropped 25 percent year-over-year to 1.64 million barrels of oil equivalent per day. During that time, oil prices rose 46 percent to an average $103.90 per barrel and natural gas prices climbed 20 percent to $5.50 per 1,000 cubic feet.
Earnings dropped 39 percent to $2.52 billion for Conoco's exploration and production operation.
Meanwhile, Conoco's refining business reported $766 million in earnings after reporting a $279 million loss a year ago, thanks to higher prices for gasoline, diesel, jet fuel and other refined products. Earnings also increased 44 percent to $199 million for Conoco's chemicals business.
Shares rose 54 cents to $74.15 in premarket trading.
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