Net Income Increases at Chevron, Unocal
Chevron Corp., the No. 2 U.S. oil company, said Wednesday first-quarter earnings rose a better-than-expected 53% on strong oil and natural gas prices, which also fueled higher profits for energy companies Unocal Corp., Amerada Hess Corp. and Kerr-McGee Corp.
San Francisco-based Chevron, which is acquiring rival Texaco Inc., said net income rose to $1.6 billion, or $2.49 a share, from $1.04 billion, or $1.59 a share a year ago. Chevron recorded a charge of $62 million for special items in the year-ago period.
After a quarter of strong oil and gas prices, Wall Street had forecast the oil major would earn between $1.35 and $2.39 a share, with a mean estimate of $2.21, according to First Call/Thomson Financial.
Separately Wednesday, Chevron and four other major oil companies petitioned the U.S. Patent and Trademark Office to reexamine Unocal’s patent on clean-burning gasoline. The companies alleged Unocal used public information to develop a patent on the formula for gasoline it knew would be used in California, effectively forcing refiners to pay it royalties on every gallon sold in the most-populous state.
Chevron’s revenue in the quarter rose 5% to $12.3 billion at Chevron, which will become the world’s fifth-largest oil company by stock market value if it completes its takeover of Texaco. The companies--which will call the new firm ChevronTexaco--are waiting approval from U.S. antitrust regulators.
Operating earnings for its exploration and production business, sensitive to swings in oil and natural gas prices, rose about 38% to $1.4 billion in the quarter.
Strong oil and gas prices also made for rosy first-quarter profit at El Segundo-based Unocal, New York-based Amerada Hess and Oklahoma City-based Kerr-McGee.
After a rally that began two years ago, crude oil prices averaged about $28.75 a barrel in the quarter, similar to the strong level they averaged last year, while natural gas prices averaged $6.45 per thousand cubic feet, more than 2 1/2 times year ago prices.
Unocal’s earnings rose to $340 million, or $1.35 a share, surpassing analysts’ forecasts. In the period a year ago, it earned $139 million, or 57 cents a share.
Better-than-expected profit also was reported by Hess. Earnings for the company rose to $337 million, or $3.79 a share, compared with $224 million, or $2.47 a share, last year.
Kerr-McGee, which runs energy and chemical businesses, said first-quarter income excluding items rose 41% to $253 million, or $2.45 a share, which was within forecasts.
Shares of Chevron, which closed up $1.02 to $95.32 on Wednesday, hit a 52-week high. Shares of Hess climbed $1.34 to end at $86.09, while Unocal rose 34 cents to close at $37.13. Kerr-McGee shares rose 95 cents to close at $72.60. All trade on the New York Stock Exchange.
