Oil and natural gas companies have been reporting their second quarter earnings during the past several days. The companies' earnings vary greatly based on their business focus.

In general, firms that have concentrated on upstream projects (exploration and production of energy resources) fared better in the second quarter than companies that have downstream (refining and marketing) operations. Due to the costs associated with the Gulf of Mexico oil spill, BP lost money in the second quarter.

This chart shows that in the first quarter of 2010, oil and natural gas industry earnings averaged 7.3 cents per dollar of sales, as compared to 7.8 cents per dollar for other industries in the Dow Jones Industrials. With 12 oil and natural gas companies reporting second quarter earnings so far, the industry average is 0.5 cents per dollar of sales.

Excluding BP, the average is 6.8 cents per dollar of sales, as compared with 12.4 cents on the dollar for 19 of the 30 companies that make up the Dow Jones Industrial average.

Oil and natural gas companies need to make healthy earnings to compete for energy projects, create jobs, and invest in energy development in traditional fuels as well as fuels for the future. Millions of American investors, including teachers, firefighters and others who own oil and natural gas stocks through their 401K plans, IRAs, pensions and mutual funds, are the beneficiaries of the industry's earnings.