Arco Earnings Up but Unocal Net Drops 12%
Atlantic Richfield on Monday reported improved earnings in the third quarter, but Unocal said earnings dropped by 12.4%.
Arco, which reported an operating loss a year earlier, said it earned $403 million in the third quarter. Quarterly revenue fell to $5.5 billion from $6 billion a year earlier.
For the record:
12:00 a.m. Oct. 30, 1985 FOR THE RECORD
Los Angeles Times Wednesday October 30, 1985 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 3 inches; 106 words Type of Material: Correction
Due to a production error, a portion of the story on Unocal’s third-quarter earnings was left out of some Tuesday editions. The story reported that petroleum product sales increased 4% for nine months ended Sept. 30 and that refining and marketing margins increased.
For the nine months ended Sept. 30, Unocal reported earnings of $459 million, compared to earnings of $547 million in the same period last year.
Unocal said that a $91-million after-tax gain on the sale of units in Union Exploration Partners, the company’s new oil and gas limited partnership, was offset by various expenses. Those expenses were incurred in fighting a takeover attempt by T. Boone Pickens Jr. and include the $11-million net premium paid to redeem $4.2 billion in secured notes.
Unocal reported earnings of $158.7 million, down from the $181.2 million that it earned in the third quarter a year earlier. The company said operating earnings were down only 8% for the quarter. Earnings per share increased to $1.37 a share from $1.04 a year ago because there are 33% fewer shares outstanding.
Unocal blamed its earnings decline on lower prices for natural gas, oil and chemicals and lower foreign petroleum earnings. Quarterly sales for Los Angeles-based Unocal increased to $3.04 billion from $2.89 billion a year ago.
Lower Operatings Costs
Arco, also based in Los Angeles, attributed its improved earnings to higher profits on petroleum products and lower oil and gas exploration expenses. The company reduced its exploration budget by one-third this year. Additionally, it said operating costs are lower. It has recently disposed of its East Coast operations and has trimmed its work force by one-fifth.
Arco said operating income for the quarter ended Sept. 30 more than doubled to $403 million, compared to $151 million a year earlier.
The company suffered a net loss of $519 million a year ago because of an $836-million charge on its metals businesses. Excluding that charge, Arco said its income in the third quarter of 1984 would have been $317 million.
The company’s petroleum refining and marketing business showed the strongest improvement, earning $99 million before taxes, compared to $11 million a year ago, reflecting stronger performance in the industry.
$344-Million Loss
Arco said results in its natural gas and chemical businesses continued to be weak.
Arco said it had spent $2.2 billion of the $4 billion that it plans to spend to repurchase its stock.
For the first nine months of 1985, Arco reported a loss of $344 million on sales of $17 billion. A year ago, Arco reported earnings of $282 million on sales of $18.6 billion.
Arco reported a $1.09-billion loss in the second quarter of 1985, the result of a $1.5-billion charge related to the company’s restructuring.
Unocal said that petroleum product sales increased 4% for nine months ended Sept. 30 and that refining and marketing margins increased. Unocal does not report quarterly earnings by business group.
For the nine months ended Sept. 30, Unocal reported earnings of $459 million on sales of $8.7 billion. A year ago, Unocal reported sales of $547 million on sales of $8.6 billion.
Unocal said that a $91-million after-tax gain on the sale of units in Union Exploration Partners, the company’s new oil and gas limited partnership, was offset by various expenses. Those expenses were incurred in fighting a takeover attempt by T. Boone Pickens Jr. and include the $11-million net premium paid to redeem $4.2 billion in secured notes. Unocal recently refinanced the debt that it took on to fight Pickens through a combination of bank debt and private financing.
