Profits Climb at Hess

Hess (HES Quote - Cramer on HES - Stock Picks) said Wednesday that its third-quarter earnings jumped 33% year over year as profits from its exploration and production operations doubled.

The company earned $395 million, or $1.23 a share, compared with $296 million, or 94 cents a share, in the third quarter of 2006. Hess received its biggest boost from E&P, where it earned $414 million, up from $206 million a year ago.

Hess said in a press release that the improvement in E&P was partly because of a 1.5% increase in oil and gas production levels. It produced 357,000 barrels a day last quarter, compared with 352,000 barrels a day a year ago.

Also helping was a higher average realized price per barrel of oil, which rose to $65.26 from $58.81 during the same period last year.

Shares of Hess gained 4.2% to $71.66.

Refining and marketing was a weak spot for Hess, as it has been for a number of other companies in the sector. At Hess, earnings from the business fell to $46 million in the third quarter from $152 million last year. The company blamed lower refined product margins for the decline in profits.

Previously, companies including BP (BP Quote - Cramer on BP - Stock Picks) and ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) have reported that refining margins slowed in the third quarter of 2007.

The company generated $7.45 billion in revenue in the quarter, compared with $7.42 billion in the second quarter and $7.04 billion last year.