Oil sector stocks clung to slim gains Thursday, drawing support from Exxon Mobil's strong first-quarter results and new all-time highs for the Dow amid a cavalcade of earnings reports from some of the industry's biggest players.
By midday, the Amex Oil Index ($XOI :1,289.16, -1.04, -0.1% ) was up 0.4% at 1,295 points, falling off an all-time intraday high of 1,298. The Philadelphia Oil Service Index ($OSX :235.08, +1.84, +0.8% ) was up 0.7% at 235 points.
Crude oil for June delivery was up 27 cents at $66.11 a barrel on the New York Mercantile Exchange, adding support to the sector. See Futures Movers.
Exxon Mobil Corp. (XOM :80.55, +0.63, +0.8% ) topped analysts' expectations Thursday with a 10% higher profit for the first three months of the year, with a strong performance by its refining operations offsetting a decline in production and revenue from its exploration and production business.
The fact that Exxon managed to increase the volume of crude it processed last quarter gave the company an advantage over competitors struggling with refinery outages and lengthy maintenance programs, all of which contributed to the quarter's exceptionally high margins. See full story.
Exxon Mobil shares were up 69 cents at $80.61. The stock hit an all-time high of $80.85 earlier in the session.
Independent refiner Valero Energy Corp. (VLO :71.74, +1.42, +2.0% ) also posted handsome first-quarter net earnings, up 30% from a year ago to $1.1 billion, or $1.86 a share. Analysts had been looking for $1.81 a share.
Valero's revenue slipped, however, to $19.7 billion from $20.9 billion.
Valero announced that it was stepping up its share buyback program to $6 billion from $2 billion, turning its strong cash flow back toward investors.
Valero shares were last trading at $72.44, a 3% gain. East Coast refiner Sunoco Inc was also basking in the glow, up 5.3% at $78.90 to lead percentage gainers in the oil index.
In the oil services group, Halliburton Co. (HAL : 31.63, +0.09, +0.3% ) shares were up 1.3% at $31.95 after handing in a first-quarter performance that topped Wall Street estimates. Halliburton said first-quarter net earnings rose to $552 million, or 54 cents a share, from $488 million, or 46 cents a share, a year ago. Earnings from continuing operations were $529 million, or 52 cents a share, while revenue rose 17% to $3.42 billion.
Analysts polled by Thomson Financial were looking for a profit of 52 cents a share.
Halliburton pinned the revenue growth to higher worldwide activity, especially in the Eastern Hemisphere, where it has made a concerted push to expand.
Investors had less to cheer about in the natural gas sector, where the Amex Natural Gas Index ($XNG : 497.89, -4.45, -0.9% ) was down 0.8% at 498.3 points. Apache Corp. (APA : 74.42, -1.98, -2.6% ) was a key factor behind the slide, down 2.4% a share at $74.56 after reporting a disappointing first quarter.
Before the opening bell, Apache said its first-quarter income fell to $492.9 million, or $1.47 a share, from $660.9 million, or $1.97 a share, a year ago. Sales were unchanged at $2 billion. Analysts had been looking for $1.60 a share from the Houston-based gas producer.
A 3% drop in natural gas futures on the Nymex was also undermining the group. The downturn followed bearish data from the U.S. Energy Department, which reported a rise last week in natural gas supplies as mild weather cut into heating demand.
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