Shares of oil company ConocoPhillips (NYSE: COP) have lost a little over 2% in early morning trading, even as the company posted a rise of 37% for its fourth-quarter profit. Continuing recession fears are dragging all the stocks down as market trading is blood red for the second straight day, even after an emergency three-quarters of a point rate cut by the Fed.
ConocoPhillips reported its quarterly profit rose to $4.37 billion, or $2.71 per share, boosted by record oil prices which recently reached $100 a barrel due to tight supplies and the weak dollar. The company posted earnings of $2.71 per share, topping analysts' predictions for $2.38 per share, according to Thomson Financial. Its revenue also rose up to $52.7 billion from $41.5 billion a year ago.
The company's exploration and production business saw a gain of $2.61 billion, helped by increased commodity prices, as well as a tax benefit and the release of escrowed funds. The third-largest U.S. oil company also said that higher refining margins pushed its marketing business profit up to $1.12 billion from $919 million a year ago.
The company's shares have been gaining ground for most of the past year. However, ConocoPhillips has shown signs of weakness for the past few months as the oil sector has been under pressure on increased concerns over an economic slowdown possibly impacting oil demand during 2008.
Crude oil prices are currently slipping along with the broader market which is seeing a dramatic decline. However, I don't believe they are likely to continue to head substantially lower, and I expect further gains for the oil producer. Even as I have been writing, this the stock has bounced from its earlier intraday low of $69.22 and is trading at $69.90 as of 10 am, down 1.7% on the day.
Let's take a look at a current 12 month chart on the stock to give you a better impression of just how hard the stock has been hit since the start of the year:
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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