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Mobil 3Q squeaks by
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October 28, 1998: 11:53 a.m. ET
Oil giant squeezes out on-target earnings despite increasingly dry fundamentals
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NEW YORK (CNNfn) - Despite falling revenue and ongoing weakness in the oil market, Mobil Corp. reported that third-quarter profits were exactly on the mark with Wall Street's expectations.
Not counting a one-time $12 million gain for the sale of European assets, Mobil net earnings fell sharply to $509 million or 61 cents per share, a 55-percent downturn from $892 million or $1.09 a year ago.
First Call analysts had expected per-share earnings of 60 cents, but Mobil stock (MOB) slid 1/2 to 73-1/8 anyway as traders digested what the company's gloomy comments meant for the oil industry.
"This quarter saw virtually all of our businesses experience sharp declines in industry fundamentals," said Mobil Chairman and Chief Executive Officer Lucio A. Noto. "Despite our self-help efforts, earnings and cash generation are down significantly this year. In response to continuing weak market conditions, the organization will accelerate efforts to implement new self-help initiatives."
Throughout the quarter, crude-oil prices have stalled at around $6 under where they were a year ago.
In the year to date, Mobil's operating earnings have slipped to $2.34 per share from $3.28 per share in the applicable 1997 period.
"In the upstream, lower worldwide crude-oil and natural-gas prices impacted earnings by about $250 million," Noto said, adding that he remained confident in the company's long-term prospects, especially in the Pacific Rim.
Revenue fell to $13.63 billion in the quarter from $16.39 billion in the year-ago period. Overall, revenue has fallen nearly $9 billion in the first nine months of 1998, slumping to $40.49 billion from $49.33 billion a year ago.
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