Newspaper article THE JOURNAL RECORD

ChevronTexaco Posts $2.5 Billion Loss

Newspaper article THE JOURNAL RECORD

ChevronTexaco Posts $2.5 Billion Loss

Article excerpt

SAN FRANCISCO (AP) -- The newly combined ChevronTexaco stumbled to a fourth quarter loss of $2.5 billion as the company paid for the aftershocks of its merger and revised its outlook in the depressed energy market.

The loss, which translated into $2.36 per share, stemmed from $3 billion in charges as the company lowered the projected value of some holdings and dealt with the costs of the October marriage between Chevron and Texaco.

The fourth quarter setback, announced Tuesday, contrasted with a profit of $2.04 billion, or $1.92 per share, in the prior year. The figure reflects the company's estimate of what it would have earned had Chevron and Texaco been together in the final three months of 2000.

Fourth quarter revenue plunged 33 percent to $21.46 billion, down from $32.26 billion in the prior year's comparable period, reflecting lower prices the company received for oil, gasoline and natural gas.

Even without the special charges, the fourth quarter represented a letdown.

ChevronTexaco said it earned $498 million, or 47 cents per share, excluding the fourth quarter charges, a 78 percent drop from net income of $2.29 billion, or $2.15 per share, in the prior year.

If not for gains from favorable currency exchanges, Chevron's fourth quarter operating profit would have been $382 million, or 36 cents per share.

The dramatic decline was much worse than Wall Street had anticipated. Excluding special charges, the consensus earnings estimate among analysts polled by Thomson Financial/First Call was 90 cents per share.

"This was a pretty bad miss, but at this point, I think it would have to be considered a hiccup rather than something worse," said industry analyst Tyler Dann of Banc of America Securities.

ChevronTexaco's fourth quarter slump illustrated the drastic turnaround in energy prices. As natural gas and oil prices soared in 2000 and the first half of 2001, Chevron -- then operating without Texaco -- enjoyed the most prosperous period of its long history. …

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