Arco’s Net Income Off 10% in the 2nd Quarter
Atlantic Richfield Co. reported on Monday a 10% drop in second-quarter net income, a result of lower profit at its West Coast refining operations and weakness in its chemical division.
Arco reported earnings of $390 million, or $1.19 per share, compared with $434 million, or $1.33 per share in the second quarter of 1996. Revenue rose to $4.81 billion, from $4.67 billion.
Arco, based in Los Angeles, said it expects to post a gain of $300 million in the fiscal third quarter by exchanging its 49.9% stake in Lyondell Petrochemical Co. for some of its debt. Arco announced the plan in March.
Though Arco’s second-quarter earnings fell, the result beat the average estimate of analysts by 7 cents a share.
“Arco’s production increase was toward the high end of the scale; it was among the best in the oil group,” said Bruce Lanni, an analyst with Oppenheimer & Co.
Atlantic Richfield shares rose $1.44 to close at $71.44 on the New York Stock Exchange.
Atlantic Richfield’s refineries are on the West Coast, where refining margins were weak in the second quarter because of increased supply of fuels. Arco was able to partially offset lower refining results with higher oil and gas production and higher sales of refined products.
Last year, West Coast wholesale fuel prices rose after regional refining problems caused shortages.
This year, supplies rose and squeezed margins. Arco said its refining and marketing division earned $66 million, down from $129 million in the year-ago quarter.
Arco said its oil and gas production rose 5%. Gasoline sales rose 5%, and sales of jet fuel rose 9%.
At a Glance:
Agoura Hills-based Guitar Center Inc. reported a second-quarter net loss of $531,000, or 3 cents per share, compared with a net loss of $78.5 million, or $3.84, in the year-ago quarter. The results reflect the company’s recapitalization and its subsequent initial public offering in March.
Cherokee Inc., based in Van Nuys, reported fiscal fourth-quarter net income of $2.7 million, or 33 cents per share, compared with a net loss of $4.8 million, or 68 cents, a year ago.
Los Angeles-based Pacific Greystone Corp. reported second-quarter net income of $7.7 million, or 52 cents per share, compared with $3 million, or 20 cents, a year ago.
