Mobil Profit Up; Unocal Back in Black After Loss
Mobil Corp., the nation’s second-largest oil company, reported higher fourth-quarter earnings Wednesday, while Unocal Corp. posted a profit after a year-earlier loss.
Despite the earnings gain, Mobil said business conditions were “unpredictable” because of Asia’s economic crisis, and El Segundo-based Unocal, which sold its California operations last year to focus on the Far East, said it remains optimistic about the region.
Fairfax, Va.-based Mobil said its net income, including a restructuring charge of $105 million for its European operations, rose 5%, to $704 million from $676 million, in 1996.
On a per-share basis, earnings rose to 86 cents per diluted share, from 82 cents a year ago.
The consensus Wall Street estimate was $1 per diluted share, according to First Call, which tracks such forecasts.
Mobil said lower oil prices pushed its exploration and production earnings below year-ago levels by $112 million, to $543 million.
Unocal posted net quarterly income of $142 million, contrasted with a year-ago loss of $497 million, which reflected charges from the $2-billion sale of the company’s West Coast refining, marketing and transportation assets to Tosco Corp.
Earnings per share were 57 cents on a diluted basis, contrasted with a loss of $1.97 per share in 1996.
Excluding one-time charges, Unocal reported earnings from continuing operations of $134 million, or 55 cents a share, on a continuing basis, compared with $160 million, or 64 cents, a year ago.
The loss reflects lower prices for crude oil and higher domestic and international exploration expenses. But the earnings hit was partly offset by lower foreign taxes caused primarily by the effects of currency devaluation in Asia.
Conoco Inc. said its fourth-quarter profit increased before gains or charges to $215 million from $213 million a year ago.
At a Glance: Tobacco
Philip Morris Cos. said fourth-quarter earnings rose 10% as it benefited from higher cigarette prices aimed at raising the cash needed to settle lawsuits against the tobacco industry.
Earnings before a gain and charges rose to $1.62 billion, or 66 cents a diluted share, from $1.47 billion, or 60 cents, a year ago. The results were in line with expectations, according to analysts surveyed by IBES International Inc.
Domestic tobacco profit rose 14% as New York-based Philip Morris, along with other cigarette makers, boosted prices about 7% in September in order to build funds to pay for a proposed $368.5-billion national settlement of lawsuits over treating sick smokers. The price increase helped Philip Morris the most because it has half of the U.S. market.
Airlines
UAL Corp., parent of United Airlines, said fourth-quarter profit rose 63% from the year-earlier period, beating analysts’ estimates as the airline benefited from heavy passenger traffic, higher fares and lower fuel prices.
The largest U.S. airline earned $231 million, or $1.74 a fully diluted share, before a charge, up from $142 million, or $1.06 a share, before charges in the year-ago quarter. UAL was expected to earn $1.61 a diluted share.
Financial Services
Glendale Federal Bank’s parent, Golden State Bancorp, said fiscal second-quarter earnings rose 25%, led by increases in lending and fee income and an 80% drop in loan losses as the California economy rebounded.
Net income rose to $28.9 million, or 41 cents a diluted share, from $23.2 million, or 30 cents, in the year-earlier period, reflecting legal expenses related to goodwill litigation against the federal government and restructuring expenses. The results fell short of a 43-cents-per-share estimate.
Consumer Products
Sunbeam Corp.’s fourth-quarter earnings failed to meet estimates, reflecting weak sales of electric blankets even as revenue surged on appliances introduced as part of a turnaround led by Chairman Al Dunlap.
Net income was $41.7 million, or 47 cents a diluted share, compared with a loss from continuing operations of $2.2 million, or 3 cents, a year ago. The results fell short of the 50-cent-a-diluted share average estimate of analysts.
* Despite getting squeezed by the turmoil in Asian markets, Corning Inc. said its fourth-quarter profit soared 25% on sales of optical fiber and specialty glass. The company posted a net profit of $108.5 million, or 47 cents a diluted share, up from $86.6 million, or 38 cents, a year ago. Analysts expected a profit of 48 cents a diluted share.
* Gillette Co.’s fourth-quarter profit rose 18% to $470.9 million, or 84 cents a basic share, from earnings before a charge of $398.3 million, or 72 cents, a year ago.
* Coca-Cola Co. said fourth-quarter earnings rose 7.2% on higher-than-expected sales in the first such report since Douglas Ivester took charge of the world’s largest beverage company last year. Net income rose to $817 million, or 33 cents a diluted share, from $762 million, or 30 cents, a year ago. It was expected to earn 34 cents on a diluted basis.
Retailing
CompUSA Inc. said fiscal second-quarter earnings rose 44% on strong sales of both powerful and inexpensive personal computers, as well as its technical support and training services. Net income rose to $34.1 million, or 36 cents a diluted share, from $23.7 million, or 25 cents, in the year-ago quarter. The results matched estimates. CompUSA has beaten earnings expectations in 12 of the last 14 quarters as it boosts revenue at its services unit and direct-computer sales business. The second quarter was also helped by strong retail sales of PCs costing less than $1,000 and PCs with Intel Corp.’s Pentium II microprocessor.
Telecommunications
SBC Communications Inc.’s fourth-quarter earnings rose 22% as the company added phone lines and wireless customers and said it has begun to cut costs through its Pacific Telesis Group acquisition. Profit before a charge rose to $915 million, or 99 cents a diluted share, from $747 million, or 81 cents, a year earlier.
Technology
Sybase Inc. said its fourth-quarter loss was wider than expected amid weak North American sales and improperly recognized sales in Japan.
The database-software company said its fourth-quarter loss was $25.5 million, or 32 cents a diluted share, compared with net income of $5.09 million, or 7 cents, a year ago. The company was expected to lose 5 cents a share.
Sybase, which warned of its loss earlier this month, said last week that its earnings would be at the low end of its estimates and that it would restate revenue for the first three quarters of 1997, after learning that some sales in Japan were improperly recognized.
* Wang Laboratories Inc. said its fiscal second-quarter profit more than doubled to $12.4 million, or 22 cents per diluted share, compared with $4.5 million, or 3 cents, a year ago.
Aerospace
AlliedSignal Inc. said its fourth-quarter profit rose 15% to $310 million, or 54 cents a diluted share, from net income of $270 million, or 46 cents, in the year-ago quarter.
* General Dynamics Corp. said fourth-quarter earnings rose 19% to $83 million, or $1.31 per diluted share, compared with $70 million, or $1.10 per share, a year ago.
Also:
DuPont Co.’s aggressive purchases resulted in fourth-quarter net earnings of $262 million, or 23 cents per diluted share, a 69% decline from profit of $858 million, or 75 cents, a year ago.
* Polaroid Corp. said fourth-quarter earnings fell 6.5% before charges to $34.6 million, or 76 cents a diluted share, from $37 million, or 78 cents, a year earlier.
* Norfolk Southern Corp. said its fourth-quarter profit rose 12% to $224 million, or 59 cents per diluted share, up from $200 million, or 53 cents, a year ago.
* Perkin-Elmer Corp. said fiscal second-quarter profit, excluding charges or gains, rose to $37 million, or 82 cents a diluted share, from $32.3 million, or 72 cents, a year earlier.
* Wm. Wrigley Jr. Co. said fourth-quarter earnings rose 15% to $62.6 million, or 54 cents a diluted share, from $54.4 million, or 47 cents, a year ago.
* Hershey Foods Corp. said fourth-quarter profit rose 1.9% to $116.1 million, or 80 cents a diluted share, from $114 million, or 74 cents, before a charge a year ago.
