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News > Companies
Oil net bucks price slump
January 22, 1998: 3:35 p.m. ET

Chevron, Exxon earnings soar as crude prices slide to a 45-month low
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NEW YORK (CNNfn) - Chevron Corp. remained upstream of a bottomed-out market for crude oil Thursday, posting fourth-quarter profits of $929 million, a twofold increase from the same quarter last year.
     Chevron's per-share diluted earnings doubled over the same period to $1.41 from 71 cents. However, the after-tax per-share operating earnings -- after accounting for a $122 net gain from special items in the 1997 fourth quarter, and a $44 million charge in the comparable period in 1996 -- were $1.23 and $1.05, respectively.
     Chevron (CHV) cited robust performances in its overseas refining and marketing operations, which were fueled by currency gains and operating earnings totaling $133 million, up from $29 million in last year's fourth quarter. Strong postings in U.S. refining and marketing; exploration and production; and overseas exploration and production contributed to the overall profit surge in the fourth quarter.
     "Our U.S. Refining and marketing business had its best year since 1988," said Ken Derr, Chevron's chairman and chief executive officer. "Our strategies of maximizing brand value, maintaining incident free operations, and focusing on controlling costs really paid ."
     Derr noted that Chevron continued to boost production volume in 1997 for the eighth consecutive year, increasing net liquids to 731,000 barrels per day, a 4 percent gain.
     Chevron's earnings report came on a day when oil prices, battered by bloated world stocks, plummeted to a 45-month low. Benchmark Brent crude dipped below the $15-a-barrel level, closing 34 cents lower in London Thursday, at $14.92 a barrel.
     On Monday, crude plunged to $15.10, the lowest level since prices briefly dipped to a sub-$13 level in early 1984.
     Reflecting the depressed market, Chevron stock was trading down 1-5/8, or 2.1 percent, at 75-3/8 at midday on the New York Stock Exchange.
     Shares of Exxon Corp., the nation's largest oil company, also were down just a day after the company reported record fourth-quarter earnings of $2.5 billion, or $1.00 per diluted share, unchanged from a year ago, when earnings were $2.495 billion.
     At mid afternoon, Exxon (XON) was off 1-3/4, at 59-5/16, a nearly 2.9 percent decline.
     Schlumberger Ltd. (SLB), an oil service firm, was one of several in the sector whose stock price declined sharply after the company reported fourth-quarter diluted earnings of 72 cents a share, below the Wall Street consensus estimate of 76 cents.
     With oil markets mired in the doldrums, analysts cautioned against reading too much into the latest earnings figures. James Clark, an oil analyst with CS First Boston, told CNN a litany of factors lay behind a "sizable build-up" in oil inventories, which American Petroleum Inventories reported Thursday were 9.3 percent above normal. Last week, that surplus was 6.3 percent. (390K WAV) or (390K AIFF).
     Exerting further pressure on inventories are rumors that Iraq may be allowed to increase oil imports under the United Nations-run oil-for-food exchange.
     Also Thursday, a Saudi Arabian official told Reuters that the Kingdom has no intention of playing the role of "swing producer" to support the flagging oil market. The source reportedly said the kingdom was "very close" to a new OPEC quota, disputing allegations from Venezuela, another OPEC member, that Saudi Arabia had already exceeded its pumping limit.
     At the end of November, OPEC raised its output limits 10 percent, to 27.5 million barrels. The hike, many analysts say, has contributed to the inventory glut because many producers already were pumping at higher levels.
     Despite warnings of a bleak oil market in 1998, Clark said there are several stand-out areas in the sector where earnings may rise. (373K WAV) or (373K AIF).
     --from staff and wire reports.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.