Printer Friendly

ARCO REPORTS EARNINGS FOR 1993 THIRD QUARTER, NINE MONTHS

 LOS ANGELES, Oct. 25 /PRNewswire/ -- ARCO (NYSE: ARC) today reported 1993 third quarter net income of $68 million, or $0.42 per share, which compares with 1992 third quarter net income of $332 million, or $2.06 per share.
 The 1993 third quarter included net charges of approximately $115 million after tax, resulting primarily from the impact of the federal corporate tax rate increase on deferred taxes and from litigation-related issues.
 "Our domestic crude oil prices were nearly 25 percent lower on average than last year," said Lodwrick M. Cook, ARCO's chairman and chief executive officer. "Domestic natural gas prices were up compared with last year; however, volumes of domestic natural gas and crude oil were lower because of property sales and natural field declines.
 "Overseas, our natural gas production is growing as four new fields in the North Sea and Indonesia are coming on stream in the third and fourth quarters of 1993. This partially offset declines in domestic gas production during the third quarter.
 "The very strong performance of our West Coast refining and marketing operations was overshadowed by the combination of the litigation-related issues, the new tax rate's impact and environmental and regulatory compliance expenses."
 ARCO's worldwide oil and gas exploration and production operations earned $17 million after tax including a charge of $47 million related to the tax rate increase. This compares with $232 million after tax in the 1992 third quarter. The average price for ARCO's domestic crude oil in the 1993 third quarter was $11.16 per barrel, down from $14.65 per barrel in the third quarter of 1992. Average domestic natural gas prices were $2.00 per thousand cubic feet, up from $1.73 per thousand cubic feet in the 1992 third quarter.
 Worldwide exploration expenses totaled $178 million before tax, compared to $123 million in the 1992 third quarter. The increase relates to higher dry hole expenses in Alaska.
 ARCO's worldwide production of crude oil and natural gas liquids averaged 654,300 barrels per day in the 1993 third quarter, down from 713,600 barrels per day in 1992's third quarter. Liquids volumes were down because of Lower 48 property divestitures in addition to natural field declines and tie-in work for the expanded gas handling system (GHX-2) at Prudhoe Bay.
 Domestic natural gas production averaged 868 million cubic feet per day, down from last year's level of 1,123 million cubic feet per day due to property sales and natural field declines.
 Foreign natural gas production was 199 million cubic feet per day in the 1993 third quarter, up from 104 million cubic feet per day in last year's quarter. Production from the Pickerill field in the U.K. North Sea, which started up in August 1992, and the offshore Northwest Java Sea field in Indonesia, which started up in September 1993, was included in the 1993 third quarter results. In addition, the 1992 third quarter volumes were unfavorably impacted by the timing of contract sales in the United Kingdom.
 ARCO's coal operations earned $24 million after tax, compared to $25 million after tax in the 1992 third quarter. Included in the 1993 results was a net benefit of $10 million after tax, largely because of a favorable reversal of a reserve established for the 1991 writedown of an Australian mine, offset in part by a $4 million charge for the increased U.S. tax rate. The coal operations were adversely impacted by lower Australian prices and by temporary operating problems at ARCO's new underground mine there.
 Refining and marketing earnings for the 1993 third quarter were $71 million after tax, compared with $123 million after tax in the 1992 third quarter. Strong third quarter results were reduced by charges of nearly $50 million after-tax for litigation-related accruals and $11 million for the increased tax rate. Most of the litigation accruals related to a Sept. 30, 1993, decision of the U.S. Court of Appeals affirming the judgment in a class action suit alleging violations of federal energy pricing regulations in effect from 1973-1981. A rehearing is being sought.
 After-tax earnings for ARCO's transportation operations totaled $30 million for the quarter, down from $53 million in the 1992 third quarter, reflecting lower earnings from the Trans Alaska Pipeline System and a charge of $16 million from the tax rate change.
 The intermediate chemicals and specialty products segment, which reflects ARCO's 83.4 percent interest in ARCO Chemical Co., had after- tax earnings of $55 million, compared with $68 million after-tax in the 1992 third quarter. Improvements in U.S. propylene oxide and derivative volumes were offset by lower European margins, higher fixed costs associated with a new plant and higher charges for future environmental costs.
 ARCO's third quarter earnings from the 49.9 percent equity interest in Lyondell Petrochemical Co. were $4 million, compared with $6 million in the 1992 third quarter.
 Sales and other operating revenues totaled $4.6 billion in the 1993 third quarter, compared with $4.8 billion in the 1992 third quarter. Through the first nine months of both 1992 and 1993 sales and operating revenues totaled $13.7 billion.
 ARCO's net income for the first nine months of 1993 was $599 million, or $3.69 per share, compared with $429 million, or $2.66 per share, for the same period in 1992. Included in the 1993 nine months were net charges of approximately $67 million after tax, which reflected the third quarter net charges of $115 million, partially offset by a previously reported second quarter net benefit of $48 million.
 The 1992 nine months results were restated to reflect the cumulative effect of changes in accounting principles adopted retroactive to the first quarter of 1992. Before making these changes, ARCO had reported 1992 nine months net income of $821 million, or $5.09 per share. The 1992 nine months also included a net benefit of approximately $65 million after tax.
 Return on ARCO's stockholders' equity for the 12 months ended Sept. 30, 1993, was 14.5 percent.
 ATLANTIC RICHFIELD CO.
 Financial and Statistical Data
 (Millions of dollars except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992(a)
 Sales & other
 operating revenues
 (including excise
 taxes) $4,553 $4,828 $13,730 $13,690
 Income before income
 taxes, minority
 interest and
 changes in
 accounting
 principles $233 $587 $1,136 $1,474
 Provision for taxes
 on income (157) (243) (512) (626)
 Minority interest in
 earnings of
 subsidiary (8) (12) (25) (27)
 Cumulative effect of
 changes in accounting
 priciples --- --- --- (392)
 Net income $68 $332 $599 $429
 Earned per share $.42 $2.06 $3.69 $2.66(b)
 After-tax segment
 earnings
 Resources:
 Oil and gas $17 $232 $427 $483
 Coal 24 25 75 61
 Products:
 Refining and
 marketing 71 123 243 304
 Transportation 30 53 133 181
 Intermediate chemicals
 & specialty products
 (ARCO Chemical Co.) 55 68 169 151
 Equity in earnings
 from Lyondell
 Petrochemical Co. 4 6 6 5
 Unallocated expenses
 and other (15) (41) (87) 32
 Interest (118) (134) (367) (396)
 Cumulative effect of
 changes in accounting
 principles --- --- --- (392)
 Net income $68 $332 $599 $429
 Average common shares
 outstanding including
 equivalents (millions
 of shares) 162.5 161.7 162.4 161.3
 Return on stockholders' equity
 Twelve-month period ended Sept. 30, 1993 - 14.5 percent
 Twelve-month period ended Sept. 30, 1992 - 10.4 percent(a)
 (a) Restated to reflect changes in accounting principles adopted retroactive to Jan. 1, 1992.
 (b) The adoption of SFAS 106 and SFAS 109 reduced earnings per share by $2.43.
 -0- 10/25/93
 /CONTACT: Albert Greenstein of ARCO, 213-486-3384/
 (ARC)


CO: ARCO ST: California IN: OIL SU: ERN

EH-JL -- LA002 -- 6184 10/25/93 10:04 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 25, 1993
Words:1282
Previous Article:REPUBLIC BANCORP INC. ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE CERTAIN ASSETS OF CALIFORNIA UNITED BANK MORTGAGE DIVISION
Next Article:ARCO DECLARES DIVIDENDS ON THREE CLASSES OF STOCK
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters