ConocoPhillips said Wednesday it earned $1.2 billion in the fourth quarter as profits from oil production made up for huge losses in the company's refining business.
The nation's third-largest oil company reported earnings of 81 cents a share in the final three months of 2009. That compares with a loss of $32 billion, or $21.37 a share, in the fourth quarter of 2008, when oil prices tanked and forced a massive writedown in the company's assets.
Excluding charges associated with its natural gas properties in Canada and a joint venture in Russia, the Houston company earned $1.16 per share in the fourth quarter. Analysts, who typically exclude one-time charges, expected fourth-quarter earnings of $1.13 a share on revenue of $40.5 billion.
Revenue fell 3 percent to $43.6 billion.
For the full year, ConocoPhillips posted earnings of $4.85 billion, or $3.24 a share, compared with a loss of $17 billion, or $11.16 a share in 2008.
Oil prices, which have doubled from the fourth quarter of 2008 to the same period in 2009, both help and hurt integrated companies like ConocoPhillips. While they can make more money from the crude they pull from the ground, the companies' refining businesses struggle to pass higher oil prices along to consumers.
That was certainly the case with ConocoPhillips.
In the fourth quarter, the company's U.S. oil and gas production operation boosted profits nearly threefold to $667 million, while its refineries lost $325 million.
A yearlong plunge in natural gas prices also cut into profits in 2009. ConocoPhillips was able to sell natural gas at higher prices in the fourth quarter, but that didn't make up for earning less than half as much per barrel in the previous three quarters.
After dealing with thin refining margins and lower natural gas prices throughout most of 2009, ConocoPhillips said last year it would shed $10 billion in assets and cut capital spending by 12 percent.
ConocoPhillips shares added 11 cents at $50.54 in morning trading.
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