Chevron Net Falls; Oil Price Drop Cited

Chevron reported Tuesday a 38% plunge in second-quarter earnings, compared to the same period last year, blaming the decline primarily on a slump in oil prices.

Worldwide earnings during the second quarter of 1986 stood at $216 million, down from $347 million in the same quarter of 1985.

Revenue for the San Francisco-based corporation this year totaled $6.8 billion in the second quarter, down from last year’s $11.7 billion.

Chevron Chairman George M. Keller attributed the sagging earnings primarily to lower petroleum product prices and to special charges related to the company’s employee reduction program, which has been in place since Chevron’s merger with Gulf.

“The precipitous decline in crude oil prices in 1986 has caused Chevron to reevaluate its near-term business plan and strategy,” Keller said. “Over the last six months, our industry has been experiencing the most traumatic economic chances in a generation. In light of these changes, we have had to make some tough decisions.”

Earnings for petroleum operations in the United States in the second quarter of this year plummeted to $95 million from $409 million in the second quarter of 1985. Refining and marketing earnings were $121 million in this year’s second quarter, compared to $166 million in the same period last year.

Keller said the overall industry outlook has led Chevron to trim capital expenditures by 30% to $3.5 billion. More reductions are under consideration, Keller added.