Italian Oil Comapny Eni Reports 1.5% Drop in Profit

Italian oil and natural gas company Eni said Thursday second-quarter net profit fell 1.5% due to an increase in exploration costs and warm weather cutting into demand at its gas and power division.

The Rome-based company said net profit in the three months ended June 30 fell to 2.27 billion euros ($3.12 billion) compared with euro2.3 billion in the same period of 2006.

Eni said second-quarter adjusted net profit, the profit figure that is most closely watched by analysts and excludes changes in the value of inventories and special items, slipped nearly 11% to 2.22 billion euros ($3.05 billion) compared with 2.48 billion euros in the equivalent period the year earlier.

The adjusted net profit figure was below expectations of 2.26 billion euros, according to an average of 13 analysts polled by Dow Jones Newswires.

The share price is up about 8% over the last three months, outperforming Italy's S&P/Mib Index, as investors bought into the company on the back of rising oil prices.