Chevron, Phillips Earnings Decline
Chevron Corp. and Phillips Petroleum Co. both reported sharp declines in earnings Thursday, blaming disruptions in oil production from tropical storms and lower crude oil prices.
On Wednesday, four other big oil companies _ Texaco Inc., Exxon Corp., Amoco Corp. and Occidental Petroleum Corp. _ also reported a steep decline in third-quarter earnings.
Chevron Corp. reported a 37 percent drop in third-quarter earnings, blaming low crude oil prices and storms in the Gulf of Mexico.
The company said net income fell to $461 million, or 70 cents a share. A year earlier, third-quarter profits were $727 million, or $1.11 a share.
Revenue fell 25 percent, from $10.33 billion to $7.68 billion.
Chevron’s stock was off $4.37 1/2 at $82.87 1/2 in midday trading on the NYSE.
``Earnings continue to suffer from the depressed crude oil prices that have plagued our industry for the past year,″ chairman and CEO Ken Derr said in a statement. He predicted continued difficulties in the fourth quarter.
September hurricanes in the Gulf of Mexico curtailed offshore oil and gas production. Hurricane Georges caused major water damage to a refinery in Pascagoula, Miss., that won’t operate again until late November, Derr said.
International earnings dropped by $85 million, due in part to foreign currency losses and economic woes in the Asian-Pacific region, Derr said.
U.S. exploration and production earnings were $102 million, down from $193 million in the third quarter of 1997. Interntional exploration and production income was $160 million, down from $280 million.
For the first nine months of 1998, Chevron reported $1.54 billion net income, or $2.35 a share, on revenue of $23.3 billion. In the first nine months of last year, income was $2.38 billion, or $3.64 a share, on revenue of $31.7 billion.
Phillips Petroleum Co.
Phillips Petroleum Co. reported a 79 percent plunge in quarterly earnings, citing a sharp drop in crude oil production because of tropical storms and problems with its facilities in Norway.
Profits for the third quarter fell to $46 million, or 18 cents per diluted share, compared to year-ago earnings of $216 million, or 81 cents a share.
Revenues fell to $2.9 billion compared to $3.9 billion a year ago.
Most of the falloff occurred in Phillips’ exploration and production unit, where net income dropped to $22 million, down from $122 million in the third quarter of 1997. Lower production and lower prices were to blame.
Phillips produced 20 percent less crude oil worldwide for two main reasons. Tropical storms in the Gulf of Mexico led to temporary shutdowns of the Sweeny, Texas, refining and petrochemical facilities, and operations in Puerto Rico. Problems also occurred with the startup of Ekofisk II facilities in Norway.
Earnings were hurt by a $6.11 per barrel drop in Phillips’ average worldwide crude oil price.
Phillips’ shares were off $1.18 3/4 at $43.37 1/2 in midday trading on the New York Stock Exchange.