Amoco Net Off Sharply; Phillips Posts Gain for Quarter

Amoco, the nation’s fifth-largest oil company, said Wednesday that its third-quarter earnings fell by 97.3% from a year earlier, in part because of a one-time special charge for reducing the value of oil holdings.

Phillips Petroleum, ranked eighth, reported a 21.5% gain in earnings. But the company said the difference from the 1985 quarter would have been a loss without non-recurring gains.

Both companies said their results were affected by plunging world oil prices.

Chicago-based Amoco said its net profit totaled $13 million on revenue of $4.47 billion in the quarter, which was affected by a one-time special charge of $162 million to write down the values of certain properties. A year earlier, Amoco had net income of $490 million on revenue of $7.2 billion.

Without the special charge, Amoco’s quarterly income would have been down by 64.3% at $175 million, the company said. Richard M. Morrow, Amoco’s chairman and chief executive, said the special charge resulted from a reassessment of the corporation’s unproved acreage holdings in light of changed economic conditions and outlook as well as disappointing exploratory drilling results in high-cost areas.

Phillips, which is based in Bartlesville, Okla., said it earned $113 million in the third quarter on revenue of $2.19 billion. This compared to restated earnings for the 1985 third quarter of $93 million on $3.94 billion in revenue.

The company said its exploration and production, gas and gas liquids businesses lost money, while its petroleum refining and marketing and its chemicals businesses were profitable.

C. J. Silas, Phillips chairman and chief executive, said the company would have sustained a $23-million quarterly loss without non-recurring transactions. These included a $148-million after-tax gain from restructuring the company’s retirement plan and $51 million mostly from sales of assets and retirement of debt.

Phillips also absorbed a $63-million third-quarter writedown reflecting a reduction in the value of reserves.

Morrow attributed Amoco’s quarterly performance to depressed results from worldwide exploration and production operations, which reflected sharply lower crude prices, reduced foreign oil production and lower domestic natural gas revenue.