Profits for Large State Firms Down 38% in 1985

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Overall profits for 45 of the largest publicly-held Oklahoma-based corporations fell 38 percent in 1985 to $813 million, despite a 3 percent gain in revenues to $38.9 million.

The 1985 totals included a 21 percent profit decline in the fourth quarter to $141.6 million - the fifth consecutive quarterly decline.

Revenues during the fourth quarter rose only 1.5 percent from 1.9 percent in the prior year period.

The 1985 profit drop was greater than the 19 percent decline by 900 of the largest U.S. companies as compiled by Standard & Poor's Compustat Services, Inc. Those companies, registered a 7 percent increase in sales.

Profit margins of the largest U.S. firms. fell to 3.3 percent vs. 4.4 percent a year earlier.

The sharp downturn in profits of Oklahoma-based firms reflects the huge losses associated with firms in the Banking and Energy Services sectors.

Banking recorded a deficit of $36.8 million, and Energy Services had a deficit of $173.0 million.

Four other sectors also posted fourth quarter losses, including Savings and Loans, Insurance, Food-Food related, and Independent Oil and Gas Exploration firms.

Only the Diversified Energy and Services sectors managed to record higher profit levels than 1984, with Diversified Energy up 163 percent and Services up 158 percent.

Manufacturing, the only other profitable sector, posted an 88 percent decline in its bottom line.

On an individual basis only 40 percent, or 18 firms, enjoyed higher profit levels, while 21 were in the red.

Higher sales/revenues levels were also only posted by 40 percent of the firms, with the Banking and Energy Services sectors once again suffering the largest declines. Banking was down22 percent, and Energy Services was down 20 percent.

Five sectors, including Services, Food-Food Related, Manufacturing and Oil and Gas Independents, participated in the higher sales level.

Profit margin improvements took place in 15 firms.

Here is a breakdown by economic sector:

DIVERSIFIED ENERGY - Each of the four firms represented in this sector posted higher profits in their respective fourth quarter periods.

However, only MAPCO and Kerr-McGee reported higher fourth quarter sales and also higher profits for the full year.

Fourth quarter sales for this sector were down 2 percent, and profits for the same period rose 163 percent. This compares to a sales decline of 1 percent and a profit gain of 2 percent for the comparable Standard & Poors Industry.

UTILITIES - Both utilities were more profitable in their latest quarter period than they were a year earlier, but profits declined for the full year.

Sales were mixed, with ONEOK's fourth quarter activity off 28 percent. That pushed ONEOK's profit margin to 1.3 percent against 2.1 percent a year earlier.

Nationally the Utility industry's sales were up 5 percent, compared to a 12 decline locally. …