ConocoPhillips' Record Production, Favorable Oil Prices Fuel Earnings Beat

ConocoPhillips (COP) beat earnings predictions for the third quarter after revenue got a boost from increased production levels and rebounding oil prices.

The oil and gas company posted profits of $2.8 billion, or $2.32 per share. Adjusted profits stood at $2.6 billion or $2.16 a share, higher than the $2.4 billion, or $2.08 a share, analysts expected according to estimates compiled by Visible Alpha. Earnings were driven by the recovery in oil prices after a weaker period in late spring and early summer but partially offset by increased production costs.

For context, surging oil prices last year saw the company report a profit of $4.5 billion, or $3.55 a share, over the same period.

Production Outlook Up After Record Quarter

ConocoPhillips reached a new record for oil production of 1.806 million barrels of oil equivalent per day (MBOED), topping 1.805 million in the prior quarter.

The company said it reached "first production ahead of schedule in October at Tommeliten A and partner-operated Breidablikk and Kobra East & Gekko in Norway and partner-operated Bohai Phase 4B in China."

ConocoPhillips expects fourth-quarter production of 1.86 million to 1.9 million barrels a day, and has ramped up its full-year production target to 1.82 million barrels per day versus the range of 1.80-1.81 million it projected in August.

But increased production levels are also tied to mounting expenses. ConocoPhillips said its operating expenses climbed by roughly 11% to almost $2 billion compared with last year at this time, enough to dampen the company's bottom line but not fully offset gains.

The company also announced a quarterly dividend of 58 cents a share.

ConocoPhillips shares rose about 5% midday Thursday, but they're down about 3% over the last year.