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In a week in which oil companies are expected to report strong returns thanks to robust energy prices, Houston-based Conoco Inc. and Enon, Ohio-based USX-Marathon Group, the fourth and sixth largest U.S. oil companies, on Monday announced higher second-quarter earnings.
Conoco, which operates more than 200 convenience stores and recently expanded its oil and natural gas reserves with the acquisition of Gulf Canada Resources, said that before special items earnings rose nearly 32 percent to $606 million, which was near the top of the range of analyst expectations, Reuters reported.
USX-Marathon, parent company of c-store giant Speedway SuperAmerica LLC and energy business of USX Corp., surpassed estimates by reporting that income rose 59 percent to $582 million.
Both oil concerns were buoyed by stronger profit margins at their U.S. refineries, as well as oil prices that averaged about $28 a barrel.
Others, including Exxon Mobil Corp., Chevron Corp. and Texaco Inc., are expected to post strong profits when they report earnings this week. But analysts say the good times could be cresting with predictions of lower corporate earnings in the third and fourth quarters ? a point recognized by Conoco Chairman and Chief Executive Archie Dunham.
"Third-quarter earnings are not expected to be as strong, as prices and margins have retreated in recent weeks," Dunham said in a statement. Lower forecasts for later this year are due to dropping gasoline prices, which reached record highs in the second quarter.