Unocal Warns That 2000 Earnings Will Miss Estimates

Unocal Corp. said Wednesday that it expects to earn $1.40 to $1.50 a share this year, less than analysts’ consensus estimates.

El Segundo-based Unocal was expected to make $1.57 a share, based on the average estimate of analysts polled by First Call Corp. Estimates ranged from 95 cents to $1.95. Unocal earned 65 cents a share last year.

The profit forecast is based on average oil prices of $21.50 a barrel on the New York Mercantile Exchange, 25% lower than the average so far this year. The company estimated natural gas will sell for $2.55 per thousand cubic feet, 4% more than it has averaged this year.

Unocal’s earnings will rise or fall by 14 cents for every $1 change in worldwide oil prices, and 7 cents for every 10-cent movement in natural gas prices in the continental U.S.

Shares of Unocal fell $1.56 to close at $26.56 on the New York Stock Exchange. March crude settled up 75 cents at $28.77 per barrel on Nymex.

Unocal said the forecasts exclude projected earnings of $12 million to $24 million for the company’s agricultural products business. Unocal said last month that it is selling the unit to Agrium Inc., Canada’s second-largest fertilizer company.

Unocal plans to spend as much as $1.3 billion to boost profits at its exploration, production and other businesses. That’s about the same as last year, even though Unocal should have about $350 million more in cash flow.

“Our financial goals are to balance near-term returns with value growth from the portfolio, being careful not to swing the pendulum too far in either direction,” Unocal Chairman and Chief Executive Roger Beach said in a statement.

Unocal said it kept its capital spending flat for 2000, forecasting expenditures of $1.2 billion to $1.3 billion.

Unocal had 1999 sales of about $6.1 billion. It operates in Asia, the U.S. and Latin America.