Phillips’ Profit Rises 86% on Higher Prices
Phillips Petroleum Co.’s first-quarter earnings rose 86% on higher U.S. natural gas prices, increased crude oil production and wider profit margins on sales of gasoline and other fuels.
The sixth-largest U.S. oil company said profit from operations rose to $504 million, or $1.96 a share, from $271 million, or $1.06, in the year-earlier period. Revenue rose 2.1% to $4.9 billion from $4.8 billion.
Phillips had said April 11 that it would miss the average analysts’ estimate of $2.19 a share because oil prices fell since the fourth quarter, when the company had a record profit of $701 million.
The purchase of Atlantic Richfield Co.’s Alaskan oil fields for $6.5 billion last year made Phillips more dependent on oil sales and less on natural gas, which sold for more than twice as much as a year earlier. It added 340,000 barrels of daily oil production to Phillips output.
The company did see bigger profit gains than larger rivals Exxon Mobil Corp. and Chevron Corp. Earnings rose 51% at Exxon Mobil and 44% at Chevron.
All integrated oil companies benefited from higher natural gas prices as well as higher profit on sales of gasoline and other fuels. Gasoline margins widened as oil prices fell from the fourth quarter and pump prices rose.
Phillips shares fell 40 cents to close at $59.60 on the New York Stock Exchange. They have risen 26% in the last year.
After Phillips issued an earnings warning early this month, analysts revised their profit forecasts. The average estimate of analysts surveyed by First Call/Thomson Financial was $1.92 a share. Estimates ranged from $1.85 to $2.01.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Loral Space & Communications Ltd., the second-biggest U.S. satellite communications company, had a narrower first-quarter loss after reducing payments to Globalstar Telecommunications Ltd. The loss narrowed to $59 million, or 25 cents a share, from $123 million, or 49 cents, a year earlier, the New York-based company said. Sales fell 18% to $261.1 million because fewer customers bought launch services.
* McKesson HBOC Inc.’s fiscal fourth-quarter profit rose 44% as pharmacies bought more medicines and the second-biggest U.S. drug wholesaler cut expenses. Profit from continuing operations in the quarter ended in March rose to $88.7 million, or 31 cents a share, from $61.4 million, or 22 cents, a year earlier. Sales, excluding shipments to customers’ warehouses--a benchmark for wholesalers--rose 17% to $8.4 billion, higher than analysts expected.
* Tyson Foods Inc., the world’s largest poultry producer, announced a fiscal second-quarter loss, citing lower chicken prices, a product recall, the impact of a tough winter and its decision to call off its purchase of meatpacker IBP Inc. It lost $6 million, or 3 cents a share, in the quarter ended March 31, contrasted with a profit of $35.7 million, or 16 cents a share, a year earlier. Excluding charges, Springdale, Ark.-based Tyson said it earned 4 cents a share, beating the analysts’ consensus of 1 cent a share. Sales rose 2% to $1.83 billion. The company said its decision to withdraw a $4.7-billion offer to buy IBP accounted for a second-quarter charge of 2 cents a share.
