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Texaco 1Q profit plummets
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April 27, 1999: 9:04 a.m. ET
Operating income sinks 60% on lower oil prices, production levels
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NEW YORK (CNNfn) - Texaco Inc. said Tuesday that first-quarter profit fell nearly 60 percent, citing lower crude oil and natural gas prices and reduced worldwide production in early 1999.
Still, the results were slightly better than Wall Street anticipated. The oil company earned $105 million, or 18 cents per share, on an operating basis in the quarter ended March 31. Earnings tracker First Call Corp. predicted profit of 17 cents per share.
In the year-ago period, Texaco (TX) earned $259 million, or 46 cents per share.
Including a one-time gain of $83 million for valuation adjustments on crude oil price increases at the end of March and an $11 million production tax refund, the company earned $199 million, or 35 cents per share, for the period. That compares with net income of $234 million, or 42 cents per share, in the parallel period in 1998.
Revenue for the quarter fell to $7.19 billion, down from $8.15 billion a year earlier.
"Continuing low crude oil and natural gas prices through early March and a high level of exploratory expenses depressed our first quarter earnings," said Chairman and CEO Peter I. Bijur. "Fortunately, prices have recently strengthened significantly, which is a very positive signal for the rest of the year."
Texaco said that operational problems in the North Sea region caused a drop in production by about 30,000 barrels a day during the period. However, North Sea production returned to normal in April and overall production worldwide is expected to be higher in the second quarter and for the rest of 1999, the company said.
For the quarter, average realized crude oil prices were $9.11 per barrel, 23 percent lower than in the 1998 period, Texaco said. Prices began to rise in March after OPEC announced production cutbacks.
Shares in Texaco closed up 3/8 at 58-1/2 on the New York Stock Exchange on Monday. 
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Texaco
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