Chevron Reports 4th-Quarter Loss
Chevron said Tuesday that it lost $86 million in the fourth quarter as the collapse of oil prices forced the San Francisco-based company to slash the stated value of its oil wells and other assets and take a big writeoff.
Shell and Mobil reported sharply reduced profits for the October-December quarter, but for the full year Mobil matched its 1985 financial performance.
Chevron’s first quarterly loss since 1933, compared to the year-earlier profit of $601 million, had been expected since the company disclosed plans for a $316-million charge against earnings to reflect the deteriorated value of its oil and gas holdings.
Not counting the writeoff, earnings for the quarter fell by nearly two-thirds compared to the same period a year earlier. For the year, Chevron earnings slumped 54% to $715 million. The results were slightly better than the most recent forecasts of some analysts.
As with the other large oil companies, Chevron Chairman George M. Keller said the profitability of refining and marketing operations that had bolstered earnings earlier in the year fell sharply in the fourth quarter.
Chevron said it lost $106 million on finding and producing oil and gas last year, versus more than $1.2 billion in profit the previous year. Earnings from refining and marketing, which tend to benefit from lower crude prices, slid to $209 million from $321 million.
Despite the recent rise in oil prices, Keller, an advocate of a government-imposed floor on crude prices, called the 1987 outlook “highly uncertain.”
Mobil Oil, traditionally strong in the retail end of the oil business, saw its profit drop 53% to $201 million in the fourth quarter. But that didn’t prevent the company from fractionally exceeding 1985’s results on a full-year basis.
Mobil said that excluding such one-time provisions as the previous year’s half-billion-dollar charge for restructuring its Montgomery Ward stores, it earned $1.55 billion last year compared to $1.54 billion in 1985.
Shell Oil of Houston, wholly owned by Europe-based Royal Dutch Shell, reported a 61% decline in fourth-quarter earnings to $254 million. For the year, Shell’s profit dropped 46% to $883 million.
“Although we see no indications of a dramatic crude oil price improvement in the near term, the worst may be behind us,” said Shell President John F. Bookout.
