Mobil Income Cut by Special Charges
Mobil, the nation’s second-largest oil company, said that because of special charges this year and last, its earnings rose in the third quarter even as operating income fell.
Mobil said its operating earnings totaled $332 million, down 15.3% from $392 million in the same period a year ago.
The figure did not include two non-recurring provisions: a $508-million charge for restructuring its Montgomery Ward subsidiary last year and a $150-million loss on its sale of Container Corp. of America, which was completed Sept. 30.
When adjusted to recognize those charges, Mobil said its earnings totaled $182 million, compared to a $116-million loss in the third quarter of 1985.
The oil giant said its quarterly revenue totaled $11.2 billion, compared to $14.7 billion in the year-ago quarter.
“The decrease in revenue was primarily attributable to lower worldwide petroleum prices,” the company said.
Mobil Chairman Allen E. Murray said third-quarter domestic petroleum operations were down $166 million, “primarily due to reduced crude oil and natural gas prices.”
Since last November, when crude oil sold for about $32 a 42-gallon barrel, prices have fallen to as low as $7 to $12 a barrel before rising to the recent range of $14 to $16.
Mobil’s retailing operations were up $28 million, as Montgomery Ward reported its most profitable third quarter since 1978. For the nine months, the retail operation earned $29 million, compared to a 1985 loss of $14 million.
The company said the discontinuation of unprofitable catalogue sales operations contributed to the earnings improvement. However, Bernard F. Brennan, the retailing operation’s president and chief executive, said in a telephone interview that “the major part of the earnings improvement (in the quarter) has been from the retail business,” primarily in improved margins and operating efficiencies.
Since late 1985, Ward has been converting its locations into low-priced specialty stores, but the company has yet to see much improvement in sales growth. Excluding the unprofitable operations that were being phased out, revenue in the third quarter was up only 2% from last year’s quarter to $1.002 billion, Brennan said.
