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Chevron restates earnings
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March 5, 1999: 7:59 p.m. ET
Oil titan revises 1998, 4Q numbers to reflect potential impact of court decision
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NEW YORK (CNNfn) - Chevron Corp. restated its fourth-quarter and 1998 financial results Friday to reflect a special charge of $637 million related to a court loss to Occidental Petroleum Co.
The charge reflects an increased reserve for the potential after-tax impact of the $742.2 million judgment reached by the Oklahoma Supreme Court in July of 1996, plus interest, through Dec. 31, 1998.
The case was brought in 1982 by Tulsa-based oil firm Cities Service Co., later bought by Occidental and renamed Oxy USA, after Gulf Oil Co., later acquired by Chevron, backed out of a merger deal.
On Tuesday, the company lost an appeal that would have reversed the Court's 1996 decision. With seven judges concurring and two dissenting, the Court ruled to let stand a Tulsa district judge's 1996 decision that Chevron (CHV) pay Oxy damages for breach of contract.
As a result of the charge, net income for 1998 was reduced to $1.34 billion, or $2.04 per diluted share, from the previously reported preliminary earnings of $1.98 billion. Total revenue of $30.56 billion was unaffected.
This compares with 1997's earnings of $3.26 billion, or $4.95 per share, on revenue totaling $41.96 billion.
Fourth-quarter net income was reduced to a loss of $206 million, or 31 cents per share, from the previously reported profit of $431 million. Revenue in 1998 totaled $7.3 billion.
In the same quarter of 1997, earnings came in at $875 million, or $1.33 per share, on revenue of $10.3 billion.
Although Chevron (CHV) plans to seek further review of the decision, accounting standards require the company to recognize potential losses.
- from staff and wire reports
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