Texaco’s Net Income Plunges in 4th Quarter

Texaco Inc., said its fourth-quarter profit tumbled 83.7% mainly because its crude oil costs rose more quickly than what it was able to charge for products.

The White Plains, N.Y.-based concern said its earnings fell to $50 million in the three months ended Dec. 31 from $307 million a year earlier.

Fourth-quarter revenue fell 37.6% to $7.8 billion from $12.5 billion in the same period in 1985.

The company said that while the volume of its petroleum product sales rose slightly in the quarter, revenue fell because of the prices it charged for them were substantially lower than a year earlier.

Foreign currency translations gains amounted to $31 million in the fourth quarter, compared to a currency translation loss of $14 million in the quarter a year earlier.

For the year, Texaco said its earnings fell 41% to $725 million from 1985’s $1.23 billion.

Revenue for the year fell 31.4% to $32.6 billion from $47.5 billion.

Foreign currency translation gains amounted to $130 million for the year, compared to a gain of $28 million a year earlier.

James W. Kinnear, chief executive, said the past year was difficult for the petroleum industry “due to the sudden and acute decline in worldwide crude oil and product prices.”

But he said “the recent firming of oil prices provides a basis for some cautious optimism that there will be a more stable marketplace in 1987.”

Texaco, which is embroiled in a three-year legal battle with Pennzoil over its acquisition of Getty Oil Co., is currently waiting to hear from the Supreme Court whether it will have to pay a potentially crippling $12.5-billion bond.

In November, 1985, a Texas jury awarded Pennzoil damages, a decision that Texaco is appealing in the state courts.

Texaco’s earnings announcement followed on the heels of bleak fourth-quarter reports from most U.S. oil producers.

Mobil Corp., which posted a profit for the year, reported a steep decline in its fourth-quarter earnings Tuesday.

Shell Oil Co. reported lower quarterly earnings and Chevron Corp. posted a loss in the fourth quarter. Both had sharply diminished earnings for the year.