Printer Friendly

CHEVRON'S THIRD QUARTER EARNINGS BEFORE SPECIAL ITEMS INCREASE 38 PERCENT TO $565 MILLION; REPORTED EARNINGS DOWN 10 PERCENT

 SAN FRANCISCO, Oct. 26 /PRNewswire/ -- Chevron Corp. (NYSE: CHV) today reported third quarter earnings of $420 million ($1.29 per share), a decrease of 10 percent from the $467 million ($1.37 per share) earned in the third quarter of 1992. However, excluding special items in both periods, results increased 38 percent to $565 million from $410 million in the same year-earlier period, marking the fourth consecutive quarter that operating earnings exceeded $500 million.
 Special charges, mostly related to the increase in the U.S. corporate income tax rate and other prior-year tax adjustments, reduced reported third quarter earnings $145 million, whereas the 1992 third quarter benefited $57 million from special items.
 Commenting on the quarter's results, Chairman and CEO Ken Derr said, "Continued declines in operating and administrative expenses, coupled with improved worldwide refined product sales margins and higher U.S. natural gas prices, contributed to our stronger earnings and more than offset the effect of weaker crude oil prices."
 "Our average U.S. crude oil realizations fell about $4.00 per barrel from last year's third quarter and were almost $2.00 lower than the second quarter of this year. Despite this, our operating results improved significantly year-to-year and we maintained the strong earnings level of the second quarter," continued Derr.
 "In large part, this performance is due to our successful cost- cutting program. One of our announced strategies is to achieve a permanent and sustainable reduction in our cost structure. With little control over market prices, we have to focus on those aspects of the business under our control.
 "Our reduction in ongoing operating and administrative expenses has far exceeded the goal I set at the beginning of last year, thanks to the outstanding efforts of our employees," said Derr. "Our year-to-date 1993 operating costs are down approximately $1.00 per barrel, or 14 percent, from 1991 levels, our base measurement year -- and this ignores any effect of inflation."
 Derr noted that the company's strategy to shift emphasis to international upstream opportunities was also beginning to pay off. "Our international crude oil production is up 10 percent from last year's third quarter," he said. "Our Tengiz joint venture in the Republic of Kazakhstan is successfully underway, and our Alba field in the North Sea is targeted for first production before year-end. We are the operator and own one-third of this development project, where production is expected to reach 70,000 barrels per day."
 Reported net income for the first nine months of 1993 was $971 million, or $2.98 per share, compared with $481 million, or $1.41 per share, reported for the 1992 first nine months, which included a $641 million charge for the cumulative effect of changes in two accounting principles. Excluding special items in both periods and the cumulative effect of the 1992 accounting changes, earnings increased 61 percent to $1.633 billion in the 1993 year-to-date period from $1.017 billion in the first nine months of 1992.
 Total revenues were $9.2 billion in the 1993 third quarter, down from $10.3 billion in last year's third quarter. Total revenues for the first nine months of 1993 were $28.2 billion, compared with $29.0 billion in the first nine months of 1992. The revenue declines were mostly the result of lower crude oil and refined product prices in the third quarter.
 Net income for the third quarter included $9 million of foreign exchange gains, compared with gains of $15 million in the prior-year quarter. For the first nine months, foreign exchange gains were $42 million and $54 million in 1993 and 1992, respectively.
 Exploration and Production
 U.S. exploration and production earnings declined to $125 million for the 1993 third quarter from $251 million earned in last year's third quarter. Lower crude oil prices and lower production volumes more than offset the benefit of higher natural gas prices and lower operating expenses. Also special charges for prior-year tax adjustments, mostly arising from the increase in the U.S. income tax rate, reduced earnings $32 million, whereas special items in the 1992 quarter, primarily asset sale gains, increased earnings $62 million.
 The company's average crude oil realization in the 1993 third quarter was $14.00 per barrel, down $3.94 from the same period last year. Average natural gas prices increased to $2.06 per thousand cubic feet from $1.75. Net liquids production declined 7 percent to 393 thousand barrels per day and net natural gas production was down 8 percent to 2 billion cubic feet per day. These declines were principally due to dispositions of producing properties in the latter part of 1992. Depreciation expense decreased in line with the lower production volumes.
 International exploration and production earnings of $113 million included $62 million of charges for prior-year tax adjustments. Earnings of $173 million in the 1992 third quarter included a $7 million asset sale gain. Excluding the effect of special items, earnings improved slightly as higher production volumes more than offset the effect of lower crude oil prices. Because of the terms of the operating agreements in several countries in which the company produces, fluctuations in crude oil prices have less impact on earnings than in the United States.
 Net liquids production increased 10 percent to 564 thousand barrels per day on higher production in Indonesia and the North Sea and the start-up, earlier this year, of production from the company's Tengiz joint venture in the Republic of Kazakhstan. Natural gas production was about flat with last year's third quarter.
 International upstream results included $19 million of foreign exchange gains compared with gains of $23 million in last year's third quarter.
 Refining and Marketing
 U.S. refining and marketing earnings increased to $164 million in the 1993 third quarter from $69 million for the same quarter last year. Special items reduced earnings in both quarters -- $30 million in 1993 and $21 million in 1992. The 1993 charges were related to environmental provisions for marketing properties and the retroactive effects of the increase in the corporate income tax rate.
 Although average sales prices for refined products declined from last year's third quarter, lower crude oil costs coupled with lower operating expenses resulted in substantially improved sales margins. Total sales volumes were slightly lower, but gasoline sales were up over 2 percent.
 International refining and marketing earnings also were up sharply for the quarter just ended to $50 million compared with $19 million in the 1992 third quarter. The earnings improvement was the result of higher refined product sales margins and volumes, especially in the Caltex areas of operations, and improved trading and shipping results. Product sales volumes increased 8 percent.
 Foreign exchange gains were $4 million in the 1993 quarter, compared with gains of $17 million in the same period last year.
 Chemicals
 Chemicals earned $6 million compared with a loss of $9 million in the prior-year third quarter. The 1993 quarter included special charges of $9 million, mostly relating to tax adjustments required as a result of the increase in the corporate income tax rate. Foreign exchange losses were $4 million compared with losses of $7 million in last year's quarter. Although there has been a slight improvement, the petrochemicals industry continues to be plagued by oversupply, caused by excess industry capacity and weak demand.
 Coal and Other Minerals
 Coal and other minerals earned $10 million in the quarter, down from $16 million in last year's quarter. Higher sales tonnage was more than offset by lower margins.
 Corporate and Other
 Corporate and other charges were $48 million compared with charges of $52 million in the third quarter of 1992. The 1993 period included net special charges of $13 million, consisting of a pension plan litigation settlement and asset write-offs, partially offset by favorable prior-year tax adjustments. The 1992 charges were reduced by $9 million of special gains.
 Foreign exchange losses were $8 million in the quarter just ended, compared with losses of $19 million in the 1992 quarter. Interest expense declined on both lower average interest rates and debt levels.
 Capital and Exploratory Expenditures
 Worldwide capital and exploratory expenditures, including the company's share of affiliates' expenditures, were $1.095 billion in the quarter, up 12 percent from the $974 million spent in last year's third quarter. Total expenditures for the first nine months of 1993 were $2.887 billion, compared with $3.046 billion spent in the same period of 1992.
 -0- 10/26/93
 /CONTACT: Larry Shushan of Chevron, 415-894-2978/
 (CHV)


CO: Chevron Corp. ST: California IN: OIL CHM SU: ERN

SG -- SF007 -- 6811 10/26/93 10:32 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 26, 1993
Words:1432
Previous Article:DUSTO NAMED TO SENIOR VICE PRESIDENT, ENGINEERING OPERATIONS AT COMCAST CABLE COMMUNICATIONS, INC.
Next Article:RJR NABISCO REPORTS THIRD-QUARTER RESULTS
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters