JOHN PORRETTO

The Associated Press

HOUSTON (AP) -ConocoPhillips became the second oil major in as many days to report plunging profits for the second quarter, saying Wednesday its earnings fell a whopping 76 percent because of the year-over-year fall in oil and gas prices and lousy refining results.

The dismal outcome for the nation's third-largest oil company followed BP PLC's report Tuesday of earnings 53 percent below the April-June period a year ago, when crude prices were at triple-digit levels.

Profit declines of 50 percent or more are expected to be the norm for producers, but they still could cause a double-take for an industry that only a year ago was notching the fattest profits on record.

ConocoPhillips took a beating in both of its major businesses finding and producing oil and natural gas and refining and selling gasoline and other types of fuel.

The company said it still expects full-year production to be up slightly from a year ago, and it stuck by its $12.5 billion capital spending budget announced in January. That's down from Conoco's $19.9 billion outlay in 2008, but the company continues to spend money on drilling and refining projects.

ConocoPhillips' results are likely to be down farther than larger competitors such as Exxon Mobil Corp., in part from Conoco's extensive refining operations, which have been pounded by weak demand.

In recent years, the company also has had to adjust to acquisitions including its $35.6 billion purchase of Burlington Resources in 2006. As recently as the final quarter of 2008, the company was stung by $34 billion in asset write-downs tied largely to the Burlington deal.

"There's always a lot of noise, if you will, in their results," said Fadel Gheit, an energy analyst at Oppenheimer&Co.

ConocoPhillips shares fell $1.57, or 3.5 percent, to close at $42.86. They've traded in a range of $34.12 to $85.42 in the past 12 months.

The Houston-based company said net income for the April-June period amounted to $1.3 billion, or 87 cents per share, versus $5.4 billion, or $3.50 per share, a year earlier. The most recent results topped by 2 cents the average profit forecast of analysts surveyed by Thomson Reuters.

Revenue fell by about half to $35.4 billion from $71.4 billion a year ago.

As expected, ConocoPhillips took a huge hit at its exploration and production, or upstream, arm. Net income amounted to $725 million, about 82 percent lower than a year ago.

This time last year oil was trading at about $125 a barrel after hitting a peak near $150. These days, crude is trading at around $67 a barrel. Natural gas prices also are well below year-ago levels.

On a positive note, ConocoPhillips' daily production in the most recent quarter averaged 1.87 million barrels of oil equivalent a day, an increase of about 7 percent from a year ago. The company attributed the uptick to new developments in the United Kingdom, Russia, Canada, Norway, China and Vietnam.

Production results include ConocoPhillips' Canadian Syncrude operations but not its Russian Lukoil business.

Results from Conoco's refining and marketing, or downstream, segment also weighed heavily on earnings a loss of $52 million, compared with earnings of $664 million a year ago.

Conoco pegged the loss to lower refining margins and volumes factors that have plagued refiners throughout the world in recent months. Across the industry, margins have shrunk and inventories of refined products such as gasoline and diesel have expanded as people cut back on travel and businesses ship fewer goods over road.

On Tuesday, Valero Energy Corp., the nation's largest independent refiner, reported a $254 million second-quarter loss and said it could lose money in the third and fourth quarters too.

Exxon Mobil Corp., the world's largest publicly traded oil company, and Royal Dutch Shell PLC are scheduled to report first-half results Thursday, followed by Chevron Corp. on Friday.

As bad as the second quarter was for ConocoPhillips, it was better than the first three months of the year, when oil prices dipped close to $30 a barrel and the industry reported some of the lowest earnings in several years.

Signaling a tough 2009 ahead, Conoco has cut 1,300 jobs this year and reduced its capital spending budget by 37 percent. Across the oil sector, producers large and small are scaling back spending on oil and gas projects as the global recession crushes energy consumption.