2 Big Oil Firms’ Earnings Jump in 4th Quarter

Texaco Inc. and Diamond Shamrock Inc. joined the list of big oil companies that recorded large fourth-quarter earnings increases, mostly because of higher energy prices resulting from the Persian Gulf conflict.

But Ashland Oil Inc. reported a quarterly loss, attributing results to the high price its refineries had to pay for oil.

Texaco said Wednesday that fourth-quarter earnings rose 35% to $388 million, compared to $287 million for the same period in 1989.

Oil companies benefited from high prices they got for crude oil they produced, although margins in their refining and marketing operations were hampered by the prices they had to pay for crude oil after the Iraqi invasion of Kuwait in August.

“Our operations were impacted by highly volatile price conditions in an unpredictable world oil market during 1990, caused mostly by events in the Middle East,” Texaco Chairman James W. Kinnear said.

Texaco, based in White Plains, N.Y., said yearly earnings of $1.45 billion were lower than the $2.14 billion reported in 1989, but those results had been boosted by the $1.2 billion sale of Texaco Canada Inc.

Texaco said quarterly sales rose from $9.2 billion to $13.0 billion, while annual sales were up from $35.7 billion to $41.8 billion.

Diamond Shamrock said its fourth-quarter earnings totaled $7.7 million on revenue of $831.7 million. In the same period of 1989, the company lost $23.8 million on revenue of $557.7 million.

For the year, Diamond Shamrock said it earned $77.5 million, more than double the 1989 profit of $28.1 million. The company’s 1990 revenue of $2.71 billion was 30% higher than 1989 revenue of $2.09 billion.

The company, based in San Antonio, attributed the results to its growing number of Corner Stores and higher fuel prices. During 1989, the company had also reported a $32-million accounting charge against earnings to reflect payment to an environmental liability fund.

Though revenues jumped significantly for Diamond Shamrock in the fourth quarter, company chairman Roger Hemminghaus said weak refinery margins dampened the improved performance.

But merchandise margins improved 5% at the company’s 2,000 gas stations and stores. Diamond Shamrock also is a processor of natural gas and petrochemicals.

Ashland Oil, meanwhile, reported a loss, as it had predicted.

The company, based in Ashland, Ky., said it lost $11 million in the first quarter of its fiscal year, largely because of the crisis in the Persian Gulf.