Arco Income Drops 37% in Quarter; Lower Prices Cited

Atlantic Richfield Co., citing depressed domestic gasoline and natural gas prices and lower chemical earnings, said Monday that its second-quarter earnings fell 37%.

During the three-month period ended June 30, Arco earned $246 million on sales of $4.2 billion, compared to earnings of $391 million on revenue of about $4 billion in the comparable quarter of 1990.

Earnings from gasoline sales declined partly because Arco was forced to cut its prices to generate demand, the company said.

“In last year’s second quarter, Arco benefited from unusually strong gasoline markets,” said Lodwrick M. Cook, Arco chairman and chief executive. “However, in the 1991 second quarter, the economic recession, weak gasoline markets and lower gasoline prices, along with higher crude oil prices, reduced product margins in our marketing area.”

On average, Arco sold gasoline to its 1,500 dealers for 7 cents a gallon less than during the second quarter of 1990, said Al Greenstein, an Arco spokesman. About 1,100 of Arco’s stations are in California and the rest are in Washington state, Oregon, Nevada and Arizona.

The earnings dip was expected because oil companies with a heavy presence in California were forced to cut prices to reduce high inventories, said Thomas Samuelson, an industry analyst at Chicago-based Duff & Phelps.

Other oil companies also reported lower earnings on Monday.

Quarterly earnings at Chicago-based Amoco Corp. fell to $238 million from $379 million a year ago. Ashland Oil Inc. of Ashland, Ky., had net income of $67 million, compared to $100 million in 1990.