Texaco Suffers $552-Million Loss in 4th Quarter

Texaco Inc., the nation’s third-largest oil company, on Tuesday reported a $552-million loss in the fourth quarter of 1984, attributing the setback to a previously announced write-down that reflected a more pessimistic assessment of the value of its oil-producing assets.

Texaco, based in White Plains, N.Y., said the large loss in the final three months of 1984 compared to a profit of $256 million a year earlier. Revenue for the year rose 16.2% to $12.2 billion from $10.5 billion.

The loss was a result of a $765-million write-down of assets that was originally announced last November, the company said.

At the time, Texaco said the action “primarily reflects a reassessment of the value of some of its manufacturing, transportation and exploration and producing assets in light of an evaluation of current and forecasted industry conditions, as well as the integration of the newly acquired assets.”

The new assets refer to Getty Oil Co., which Texaco bought last year for $10.1 billion.

Without the write-down, earnings in the fourth quarter would have been $213 million, still a 16.8% drop from a year earlier.

Texaco said the 1984 results of Getty “virtually offset” the financing costs related to the takeover.

It did not provide specific figures on either Getty’s results or the interest expense associated with the acquisition. But Texaco said the more than tripling of non-operating charges last year, to $638 million from $211 million in 1983, was principally due to those financing expenses.

For all of 1984, earnings fell 75.2% to $306 million from $1.23 billion in 1983. Without the write-down, annual profit would have been down 13.1% at $1.07 billion.

Revenue for the year rose 17% to $48.1 billion from $41.1 billion.

“Although worldwide petroleum demand strengthened somewhat during 1984, the benefit from this increased demand was offset in the market by the continued surplus of crude oil and petroleum products. These excess supplies led to narrow or negative (profit) margins in many markets,” said John K. McKinley, Texaco’s chairman.

Losses from Texaco’s refining and marketing operations widened to $309 million in 1984 from $30 million a year earlier.