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Oil giants post slick 2Q
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July 21, 1998: 12:58 p.m. ET
Exxon, Texaco earnings beat estimates despite slump in crude prices
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NEW YORK (CNNfn) - Exxon Corp. and Texaco Inc. reported better-than-expected second-quarter earnings Tuesday, though both companies said their results were hampered by lower crude oil prices.
Exxon reported profits of $1.62 billion, or 65 cents a diluted share, ahead of Fall Call's forecast of 63 cents a share. Revenue for the quarter was $29.6 billion.
The earnings, however, were 18 percent below the year-ago quarter, when Exxon posted a profit of $1.96 billion, or 78 cents a share, on $34.2 billion in revenue.
Exxon cited weaker crude oil prices, which were down about $5 a barrel, 26 percent lower than last year.
"This year's second-quarter results benefited from higher liquids production, increased petroleum product and chemical sales volumes, and improved downstream margins," said Lee Raymond, Exxon chairman.
In the first six months of 1998, Exxon earned $3.51 billion, or $1.41 a share, on $59.5 billion in revenue, down from $4.1 billion, or $1.66 a share, on $69.4 billion revenue a year earlier.
Exxon (XON) shares were up 9/16 to 71-1/8 in early Tuesday trading.
Texaco: a dime ahead
Texaco reported second-quarter operating income of $335 million, or 60 cents a share, on $8 billion in revenue, well ahead of First Call estimates of profits of 50 cents a share.
Those figures, however, trailed the year-ago $440 million, or 81 cents a share, on $11.5 billion in revenue.
Including a $7 million gain, Texaco posted earnings of $342 million, or 61 cents a share.
The company earned $571 million, or $1.05 a share, in the year-ago quarter, including a $131 million gain.
Texaco said improved margins and higher sales volumes in the international downstream, as well as an 11 percent increase in worldwide production only partially offset the effects of lower oil prices.
"The combination of excessive crude oil inventories and slower demand growth continues to keep downward pressure on prices," said Peter Bijur, Texaco chairman and CEO.
"Recently announced production cuts by certain oil producing nations should lead to a better supply/demand balance and a recovery in prices. In this environment, we continue to strategically position the company for long-term profitability by focusing on increasing our reserve base."
For the first half, Texaco reported net income of $601 million, or $1.01 a share, on $16.2 billion in revenue, down from $1.55 billion, or $2.85 a share, on $23.5 billion revenue a year earlier.
Texaco (TX) shares climbed 1-1/2 to 59-5/16 in early Tuesday trading. 
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