EARNINGS : One-Time Events Push Unocal’s Profit Down 46%
Unocal Corp. reported Monday that its net income fell 45.9% in 1989 to $260 million due to some unusual one-time events, higher costs and lower profits from its refining, marketing and chemical divisions.
The Los Angeles-based energy company’s 1989 estimated earnings compared to $480 million in 1988 but were in line with expectations and industry trends, analysts said.
For the record:
12:00 a.m. Feb. 2, 1990 For the Record
Los Angeles Times Friday February 2, 1990 Home Edition Business Part D Page 2 Column 6 Financial Desk 1 inches; 31 words Type of Material: Correction
Unocal Corp.--In a story on Unocal Corp.’s earnings in Tuesday’s Business section, the decline in the energy company’s average daily worldwide oil production was misstated. Production actually declined 1.93% in 1989.
Without the one-time charges in 1989, full-year net earnings would have been up 24% over 1988, reflecting higher profits from oil and gas exploration and production, as well as the settlement of natural gas contract disputes that brought a one-time gain of $53 million, Unocal Chairman Richard J. Stegemeier said.
Revenue in 1989 was $11.36 billion, up from $10.15 billion in 1988.
The 1989 earnings figures included a $98-million loss on the sale of Unocal’s Obed Mountain coal mine in Canada. Part of that contributed to a fourth-quarter net loss of $26 million, contrasted with net earnings of $141 million in the fourth quarter of 1988.
The 1989 results also included a one-time $63-million gain on the sale of a half interest of its Midwestern refining and marketing operations to Venezuela, as well as a $41-million charge for the shutdown of Unocal’s Beaumont refinery in Texas.
For the year, exploration and production earnings were up 38.5%, reflecting higher oil and gas prices that were partly offset by higher costs of production and drilling unsuccessful wells. The company’s daily worldwide production fell 19.34% in 1989.
Refining, marketing and transportation earnings fell 13.7% in 1989, due to narrower profit margins and higher refinery maintenance costs. Chemical earnings also fell because of higher costs.
In 1988, Unocal’s full-year earnings included a one-time gain of $456 million from an accounting change, a $98-million gain from the sale of Unocal’s downtown headquarters building and an after-tax charge of $341 million from a writedown of certain company assets.
