Enter multiple symbols separated by commas

China' Sinopec First-Quarter Profit Beats Forecast, Outlook Is Rosy

Top Asian oil refiner Sinopec beat forecasts with a more than two-fold jump in quarterly earnings as falling oil prices helped its refining arm turn around, and it flagged a 50% surge in first-half profit.

Now with oil prices likely to hold steady or even soften this year, investors foresee double-digit net profit growth for Sinopec in 2007. But its fortunes also hinge on whether Beijing allows it to charge more for refined products.

State-run Sinopec said this month it expected net profit to rise more than half in the first quarter -- but based on Chinese accounting standards -- after its refining arm returned to profits in the fourth quarter of 2006.

Global crude oil prices plunged to a 19-month low of $51 a barrel in January before rebounding to around $65 a barrel at the end of March.

Sinopec, which vies with PetroChina and CNOOC to supply the world's second largest oil market, said its net profit was 19.4 billion yuan ($2.5 billion) in the first three months versus a revised 9.55 billion yuan a year earlier. The result beat a forecast for 18 billion yuan, according to three analysts polled by Reuters.

A top economic planning official said last month China would adopt a cautious approach in reforming energy prices, to better suit international levels.

Sinopec, also China's second-largest oil and gas producer, pumped 2.3% more crude and 15.6% more natural gas in 2006. It processed 146.32 million tons of crude last year, up 4.6% from a year earlier.

Shares in Sinopec fell 8% in the January to March period, outperforming PetroChina's 16% fall but lagging CNOOC's 7% drop.

Sinopec trades at 9.5 times forecast earnings, cheaper than Exxon Mobil's 12.2 and BP's 11.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Jessica Alba

    The actress' company got burned after consumers came out in droves, saying the company's sunscreen doesn't provide much sun protection at all.

  • EON Sports VR

    Multiple NFL teams are now using virtual reality simulations to complement practice and, more importantly, keep players healthy.

  • What a robotic sniper might look like.

    A global arms race of robotic killing machines is inevitable if countries pursue autonomous weaponry, experts said.

U.S. Video

  • Toyota auto sales up 0.6% in July

    CNBC's Phil LeBeau reports on Toyota's better-than-expected sales number for July.

  • CNBC update: 400 lb grouper

    New York Attorney General Schneiderman announced retailers Wal-Mart, Sears and Amazon have agreed to keep realistic toy guns off their shelves, and a fisherman hooked a 7-foot, 412 pound grouper, reports CNBC's Sue Herera.

  • DC's fight against climate change

    President Obama is unveiling the first-ever limits on power plant carbon emissions today. Brian Deese, White House senior advisor, discusses emission targets, and investments in cleaner sources of energy to fight climate change.