Texaco Posts Gain; Sohio, Pennzoil Profits Slip

Texaco Inc., the nation’s third-largest oil company, said that earnings rose 28.1% in the third quarter as profits rebounded from the sale of gasoline and other refined petroleum products.

Standard Oil Co. (Ohio), which is 55% owned by British Petroleum PLC, said its third-quarter earnings slipped 3.6% because of increased taxes. Pennzoil said profit tumbled 24.8% from a year earlier because of lower prices for oil and natural gas.

Texaco was one of the few large oil companies to post a gain in the third quarter, although most of the industry reported a brisk improvement in the refining and marketing business.

For most other leading oil companies, however, falling world crude oil prices and the expenses associated with the restructuring of the oil industry wiped out refining gains.

Texaco reported a profit of $301 million in the third quarter, against $235 million a year earlier.

The gain came despite a 7.4% drop in revenue that resulted from falling crude oil prices. Revenue slipped to $11.3 billion from $12.2 billion a year earlier.

Sohio said its profit in the third quarter fell to $346 million from $359 million a year earlier.

Earnings per share did not fall as much as net income as a result of a stock buy-back program that reduced the number of shares outstanding.

Revenue climbed 19.1% to $3.44 billion from $2.89 billion.

Alton W. Whitehouse, Sohio’s chairman, said that operating income actually rose 7% in the third quarter but that net income fell because the company increased its provision for income taxes by 20%.

“This (tax provision) increase resulted from higher pretax income and lower investment tax credits than originally expected,” he said.

Whitehouse said the improvement in operating earnings came from higher sales volumes of Alaskan crude oil and improved refining and marketing results. Those were offset by higher exploration expenses for oil and gas and lower performance in Sohio’s coal business.

Pennzoil said profit in the third quarter fell to $44.4 million from $59.0 million. Revenue slipped 5.8% to $564.0 million from $598.7 million.

J. Hugh Liedtke, Pennzoil’s chairman, said substantial gains from refining and marketing were offset by lower prices for oil and natural gas and reduced production.