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Texaco issues profit warning
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January 8, 1999: 12:06 p.m. ET
Oil firm sees significant 4Q earnings shortfall, will take $350M charge
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NEW YORK (CNNfn) - Texaco Inc. warned shareholders Friday that fourth-quarter operating results could be less than half of analysts' expectations, due largely to lingering weak oil prices.
The nation's fourth-largest oil company said operating earnings will be 13 cents to 16 cents a share, significantly less than the 30 cents a share analysts were expecting. It also blamed poor refining margins and currency translation losses of $65 million in its Caltex Asian operations.
At the same time, Texaco said it will take a $350 million charge in the quarter to reflect job cuts and the lower value of its oil properties as a result of a drop in oil prices to 12-year lows.
"This past year was extremely difficult for the entire industry and first quarter 1999 appears to be equally challenging; however, Texaco will continue to effectively manage its business during this period of low energy prices," said Texaco Senior Vice resident and Chief Financial Officer Patrick J. Lynch.
Shares of Texaco (TX) were off 1/16 at 54-5/16 on the New York Stock Exchange following the announcement.
"Continuing weak demand and surplus supplies have driven crude oil, natural gas and refined product prices sharply downward," Lynch said.
"In this low price environment, we will be required to revalue inventories," he said. "We will also write down oil and gas properties where remaining investments will not be fully recovered." 
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Texaco
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