Slump in prices dents earnings of U.S. oil producers

January 25, 1992|By Thomas C. Hayes | Thomas C. Hayes,New York Times News Service

DALLAS -- Three of the nation's biggest oil companies reported lower earnings yesterday for the fourth quarter, as world crude prices slumped and the recession slowed sales of gasoline and other refined products.

Exxon said net income fell 28.2 percent. Mobil reported an earnings decline of 38.5 percent. And Chevron, which took a one-time charge against earnings of $244 million, said net income plunged 93.8 percent.

The reports followed the trend of sharply lower earnings for the oil industry in the quarter, which partly reflected the unusually high profits most oil companies posted in the last quarter of 1990.

Profits in exploration and production units soared in late 1990, amid worries of war and destruction in the Persian Gulf oil fields that pushed crude prices to an average of nearly $30 a barrel.

Overall, Exxon, Mobil and Chevron each reported better results overseas than in the United States during the recent quarter, in both exploration and refining operations.

"U.S. refining and marketing operations were particularly disappointing, but that's starting to turn around," said Bryan Jacoboski, an analyst at Paine Webber Inc.

"December was the first month with evidence of improvement, and profit margins have improved the first two weeks in January for most companies," Mr. Jacoboski said.

But Allen E. Murray, Mobil Corp.'s chairman and chief executive, said business conditions were not improving. Prices were weak for crude oil worldwide and for natural gas in the United States; refinery profit margins were "very weak" in the United States, he added.

Net income at Exxon Corp., the world's biggest oil company, was $1.12 billion, or 89 cents a share, compared with $1.56 billion, or $1.23 a share, in the period a year ago. Revenues fell 12.1 percent, to $30.87 billion from $35.12 billion.

The company, based in Irving, Texas, said the price for its crude sold in the fourth quarter fell by an average of $10.50 a barrel from the comparable quarter in 1990. For that reason, earnings from worldwide exploration and production also fell, to $616 million from $862 million.

Exxon's share price rose $1.25 yesterday to $60.25 in trading on the New York Stock Exchange.

Net income at Mobil, the nation's second-largest oil company, fell to $401 million in the quarter, or 97 cents a share, from $652 million, or $1.58 a share, in the comparable period a year ago. Revenues declined 14.2 percent, to $16.63 billion from $19.38 billion.

Mobil's operations for the quarter posted a deeper decline of 51.2 percent, after removing the effects of special charges in both quarters.

The company added $12 million to operating earnings because of one-time charges in the most recent quarter. In the quarter a year ago, special charges pared earnings by $145 million.

Mobil's share price rose by 37.5 cents yesterday, to $67.125, in trading on the NYSE.

Chevron Corp.'s net income was $39 million, or 11 cents a share, compared with $633 million, or $1.80 a share, in the fourth quarter of 1990. Revenues fell 24.6 percent, to $10.40 billion from $13.80 billion.

The nation's fourth-largest oil company, Chevron reported last week that it would take a $244 million charge in the quarter, with $185 million allocated to layoffs and operating cutbacks at its refinery in Port Arthur, Texas.

Chevron's share price fell 50 cents yesterday, to $66.25, in trading on the NYSE.

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