Pennzoil Profit Falls
Aug. 02, 1989
HOUSTON (AP) _ Pennzoil Co. recorded a major increase in operating income in the second quarter, but its net profit fell sharply compared with the same quarter last year due to a one-time gain then from the settlement of its lawsuit with Texaco Inc.
Pennzoil said Tuesday that earnings in the quarter ended June 30 totaled $118 million, or $3.15 per share, on revenue of $791.2 million. That compares with a profit of $1.39 billion, or $34.68 per share, in the year-ago quarter on revenue of $547.6 million.
Last year's revenue figure does not include the $1.66 billion gain from the $3 billion cash settlement of Pennzoil's suit against Texaco.
Pennzoil's operating income jumped to $230.5 million in the second quarter, compared with an operating loss in 1988's second quarter of $266.8 million.
This year's profit included an $86.8 million gain associated with the sale of Pennzoil's holdings in Burlington Resources Inc.
Pennzoil said oil and gas income rose from $5.46 million in the 1988 quarter to $30.01 million in this year's period while motor oil and automotive products income fell to $15.1 million from $29.62 million.
President Randal McDonald attributed the higher oil and gas income to higher crude oil prices and lower exploration expenses. The lower motor oil income was caused by a $13.5 million provision for losses associated with its recent investment in Jiffy Lube International and the quick lube industry.
For the first half of the year, net income was $170.6 million, or $4.49 per share, on revenue of $1.46 billion. In the same period last year, the company had a profit of $1.4 billion, or $34.48 per share, on revenue of $1.03 billion. The revenue figure for the 1988 period does not include the gain from the Texaco suit.