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News > Companies
Chevron, Texaco slip in Q1
April 23, 1998: 3:14 p.m. ET

Oil price slump causes big skid; Chevron beats Street, Texaco falls short
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NEW YORK (CNNfn) - Chevron Corp. and Texaco Inc. weren't spared from a rapid dip in global crude oil prices that has caused a big slide in profits at many oil powerhouses in the first quarter.
     Average crude oil prices in the first quarter 1998 fell more than $7.50 to less than $12 per barrel.
     That drop was felt at Chevron, where net income in the quarter ended March 31 fell to $500 million, or 76 cents per diluted share, compared to $831 million, or $1.27 a share, in the first quarter of 1997.
     Still, the results surpassed Wall Street's consensus estimate for the latest quarter of 67 cents a share, as compiled by First Call.
     Revenues for the quarter fell 31 percent to $7.7 billion compared with the year-ago period.
     "Unfortunately, first quarter 1998 earnings were affected adversely by several major factors - significantly lower crude oil prices, lower natural gas prices, foreign currency losses and major scheduled maintenance at two of our main U.S. refineries," said Ken Derr, Chevron's chairman and chief executive officer.
     Chevron estimates that certain refinery renovations were responsible for a $75 million drag on its earnings in the first quarter of 1998. Currency troubles - mainly in the Pacific Rim -cut an additional $46 million off profits in the quarter.
     U.S. upstream earnings - those from production and exploration - plunged 70 percent to $106 million. But Chevron received $49 million from the sale of two properties in the first quarter of 1997 and no special items in 1997.
     International upstream earnings fell more than 71 percent to $99 million in the quarter, hurt partly by a one-time loss of $58 million due to tax-deferred effects.
     Downstream net earnings - from marketing, refining and transportation - fell 36 percent to $45 million in the quarter from the same period a year ago.
     Shares of Dow issue Chevron (CHV) barely budged, edging up 1/16 to 84-1/8.
     Texaco's first-quarter 1998 profit totaled $259 million, or 46 cents per diluted share, down sharply from $980 million, or $1.80 a share, in the same period a year ago.
     However, the first-quarter 1997 results included a special $488 million benefit related to a tax settlement in the year-earlier period. Excluding the gain, operating earnings came to $492 million in the first quarter of 1997.
     The latest results fell four cents short of Wall Street's consensus estimate of 50 cents per share, as compiled by First Call.
     Revenues for the quarter fell 33 percent to $8.1 billion compared to the year-ago period.
     But Texaco said it is on track to boost production in 1998.
     "Operationally, we experienced a very good first quarter," said Peter Bijur, chief executive officer and chairman of Texaco. "Production increases were on target toward achieving our planned double-digit growth for the year, however, total earnings were significantly impacted by the drop in worldwide crude oil and natural gas prices.''
     Texaco said U.S. upstream earnings in the first quarter fell 66 percent to $107 million from the year-earlier span. International upstream earnings fell 74 percent to $40 million.
     Downstream earnings in the first quarter were $47 million compared to $6 million a year ago - boosted in part by an alliance with Shell Oil Co.
     Texaco shares (TX) slipped 3/16 to 61- 13/16 Thursday afternoon.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.