Mobil, Chevron Post Big Gains; Shell Net Slides

Four of the nation’s oil companies reported huge gains in their third-quarter profits Tuesday as hefty demand in refining and marketing segments offset declining crude oil prices.

Mobil and Chevron each reported double-digit gains, while profits at Texaco and Phillips Petroleum more than doubled in the latest period.

Meanwhile, Shell Oil and Sun reported sharp declines in their net earnings in part because of declining crude oil prices.

The larger oil companies said earnings were both hurt and helped by falling crude prices. Lower costs for the raw product contributed to higher profit margins in refining and marketing operations but eroded gains in exploration and production.

Crude Cost Down

Mobil Chairman Allen E. Murray said his company’s refining and marketing segments turned in strong performances thanks to improved margins stemming from tight refinery capacity and product inventories.

In addition, strong consumer demand boosted sales of gasoline and lubricants. Mobil’s chemical unit also reported a record quarter, Murray said.

However, those improvements were partially offset by a 26% drop in crude prices and higher exploration costs, which lowered the companies’ profits from exploration and production.

Analysts attribute most of this year’s drop in crude prices to the excess supply of oil on world markets arising from the failure of the Organization of Petroleum Exporting Countries to restrain its production.

For the latest quarter, New York-based Mobil had net income of $557 million, up 69% from $330 million in the year-ago period. Revenue totaled $13.12 billion, down a fraction from $13.14 billion reported a year ago.

For the first nine months, profit at the nation’s second-largest oil company rose 86% to $1.62 billion, compared to $874 million in the same period last year. Revenue totaled $40.99 billion, up 10% from $37.12 billion a year ago.

In White Plains, N.Y., Texaco, the nation’s third-largest oil company, reported a 121% rise in third-quarter profit, to $239 million from $108 million in the 1987 quarter. Revenue totaled $8.69 billion, down 3% from $8.96 billion last year.

For the first nine months, Texaco’s profit jumped 183% to $1.01 billion, compared to $355 million for the 1987 period. Revenue totaled $26.8 billion, up 3% from $26 billion in the 1987 period.

Texaco Chairman James W. Kinnear said the company is beginning to see benefits from its recent restructuring.

San Francisco-based Chevron, the fourth-largest U.S. oil concern, said its profit rose 41% to $420 million in the third quarter, compared to $297 million in the 1987 period. Chevron’s revenue, meanwhile, dropped 6.4% in the latest quarter to $7.2 billion, from $7.7 billion last year.

For the nine months, Chevron’s net earnings jumped 57% to $1.6 billion from $1.01 billion. Its revenue rose to $22 billion, up 1.3% from $21.7 billion.

Phillips, based in Bartlesville, Okla., reported the strongest quarterly profit gains--nearly sixfold--to $215 million from $31 million. The company’s sales totaled $2.85 billion, up a fraction from $2.80 billion.

Since January, Phillips’ net surged to $515 million from $2 million in the comparable 1987 period. It had revenue of $8.5 billion, up 7.6% from $7.9 billion.

Phillips’ spokesman Jere Smith said a major streamlining, which included the layoff of more than 1,500 workers, contributed to the latest figures.

Meanwhile, Shell, the sixth-largest U.S. oil company, said sagging crude prices pulled its quarterly earnings down 16.2%. The company’s net was $352 million on revenue of $5.4 billion, compared to $420 million in the 1987 quarter on sales of $5.6 billion.

But for the first nine months, Houston-based Shell’s net improved 134% to $1.9 billion, on revenue of $15.9 billion, compared to a profit in the 1987 period of $795 million, on revenue of $15.3 billion.

Lower crude prices also contributed to a 47% drop in Sun’s latest earnings, which declined 47% to $72 million from $137 million last year. Its revenue totaled $2.46 billion, down 2.3% from $2.52 billion.