Exxon, Sun Results Up Sharply in Quarter; Shell’s Profit Slips

Exxon, the nation’s largest oil company, reported significantly higher first-quarter earnings Wednesday.

Sun Co., the 10th-largest oil firm, also reported a sharply higher profit, but Shell Oil, the seventh largest, said its earnings were down.

Exxon said its net profit totaled $1.7 billion. That was up 31% over the same period in 1985, when the company reported earnings of $1.3 billion.

Sun reported a 20% increase--to $146 million from $127 million in the first quarter of 1985.

Shell said its quarterly earnings were $276 million, down 7% from the year-ago first-quarter income of $296 million. The company is wholly owned by Royal Dutch-Shell, which is based in both London and The Hague.

Exxon said its revenue in the first quarter was $22.2 billion, down from $23.3 billion a year earlier.

The New York-based company also pointed out that its quarterly net return was affected by a one-time charge of $235 million after taxes. The charge was to cover the cost of a recently announced regional consolidation, including a special employment separation program related to the resulting staff reductions, officials said.

C. C. Garvin Jr., Exxon’s chairman, said that compared to 1985’s first-quarter earnings, the latest performance was sharply reduced by the period’s unprecedented decline in crude oil prices, accompanied by a continued weakening of the dollar.

During the latest quarter, the company’s U.S. and foreign production income totaled $1.2 billion, compared to $1.3 billion a year ago.

The company said foreign refining and marketing earnings totaled $447 million in the first quarter, compared to $16 million in the year-ago period. U.S. refining and marketing earnings increased to $160 million from $13 million.

In Houston, Shell President John Bookout said the company would not be able to sustain even its first-quarter earnings performance, “as exploration and production earnings will be lower in future quarters without crude oil price improvement.”

Shell reported that earnings from its oil products segment increased to $61 million from $8 million in the first quarter, while its chemical products segment’s earnings were up to $72 million from $13 million.

Bookout also noted that “about half of the production earnings decline was attributable to a first-quarter 1986 windfall profit tax adjustment.”

At the same time, the company’s oil and gas production segment’s earnings declined to $201 million from $301 million a year earlier.

Revenue totaled $4.666 billion in the first quarter, down from $4.743 billion a year earlier.

“The sharp decline in crude oil prices impaired oil and gas exploration and production earnings but benefited earnings in the oil and chemical products businesses through lower raw material costs,” Bookout said.

At Sun Oil’s Radnor, Pa., headquarters, President and Chief Executive Robert McClements Jr. said the company’s $68-million refining and marketing income was “the highest level of quarterly earnings since 1980 for our downstream operation.”

“The $48-million increase over the year-ago period is primarily due to the overall strength of our basic business, particularly in the retail fuel area.”

Besides higher refining and marketing earnings, McClements noted that the company’s industrial services earnings were higher by $6 million, mostly generated by Sun’s real estate subsidiary, Radnor Corp.

Net financing expenses were also significantly lower than in 1985’s first quarter, accounting for $23 million of Sun’s earnings increase.

McClements also said that Sun benefited from increased interest income from a larger investment portfolio. Proceeds from various divestments in 1985 totaled about $1.5 billion.

Sun’s first-quarter revenue totaled $3.4 billion, which was down from $3.7 billion a year ago.