Newspaper article THE JOURNAL RECORD

Majors Post Large Drop in Profits

Newspaper article THE JOURNAL RECORD

Majors Post Large Drop in Profits

Article excerpt

Three of the nation's big oil companies reported a steep decline in third quarter earnings Wednesday, hurt by weak crude oil and natural gas prices.

Texaco Inc.'s earnings fell by more than 56 percent from a year ago, while Exxon's results dropped by 23 percent and Amoco's third quarter net income was down by nearly 52 percent. Bartlesville- based Phillips Petroleum is expected to report its third quarter earnings today.

White Plains, N.Y.-based Texaco earned $215 million, or 38 cents a share on a diluted basis, for the third quarter, compared with $490 million, or 90 cents a share on a diluted basis, a year ago. Revenue for the third quarter was $7.7 billion, down from $11.09 billion a year ago. The results fell below analysts' estimates of 41 cents a share in the quarter. Texaco attributed the lower earnings to a slump in crude oil and natural gas prices and continued economic instability in Asia. The company said the average quarterly crude oil prices were at their lowest level since 1986, and natural gas prices fell 11 percent from a year ago. Some of the losses were offset by a 9 percent rise in production growth and better expense controls. For the first nine months of the year, Texaco earned $816 million, or $1.46 a share on a diluted basis, compared with $2.04 billion, or $3.75 a share on a diluted basis, a year ago. Revenues were $23.89 billion, down $34.6 billion from a year ago. Irving, Texas-based Exxon earned $1.4 billion, or 58 cents a share, in the third quarter, compared with $1.82 billion, or 73 cents a share, a year ago. Revenues were $28.78 billion, down from $32.75 billion a year ago. The results topped analysts' expectations of 56 cents a share. Exxon chairman Lee R. Raymond said the losses stemmed from weaker crude oil prices, which on average were about $6 per barrel -- a 33 percent fall from last year. "Earnings were also adversely affected by lower natural gas prices and lower industry refining margins in the U.S. and Asia-Pacific," Raymond said. Exxon's natural gas business declined to the lowest quarterly level in nearly three years. For the first nine months of the year, Exxon earned nearly $4. …

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