Unocal, blaming lower fuel prices and higher interest costs, said its net earnings plunged 71% in the second quarter.
Meanwhile, Atlantic Richfield blamed the same reasons as its operating income, excluding massive writeoffs from last year's $1.5-billion restructuring, plummeted 63% to $150 million in the second quarter.
Unocal's chairman and chief executive, Fred L. Hartley, said major factors in the decline were sharply lower oil prices, lower domestic natural gas production and chemicals earnings, as well as pretax interest costs that rose 24% to $122 million for the quarter.
Unocal last year took on $4.2 billion in debt to buy back one-third of its stock as part of the company's successful effort to thwart a takeover attempt by T. Boone Pickens Jr.
The Los Angeles-based company, parent of Union Oil Co. of California, earned $34.6 million on revenue of $2.1 billion for the three months ended June 30, compared to the year-earlier period, when it earned $120.4 million on revenue of $2.89 billion.
Arco's chairman and chief executive, Lodwrick Cook, said: "The continued deterioration of crude oil prices was the principal factor in the decline in income from continuing operations before unusual items. "There is no question that earnings will be depressed further if prices remain at current levels," Cook said, but he added that he expects oil prices to begin rising in 1987.
Despite the dismal operating earnings, Arco's net income for the second quarter ended June 30 was $150 million on revenue of $3.55 billion, compared to a year earlier, when it lost $1.1 billion.
Arco's oil and gas division suffered the most. It posted an after-tax operating loss of $1 million for the quarter, compared to a profit of $303 million a year earlier.
Arco's interest costs increased by 70% to $126 million for the quarter.