While Mobil Corp reported higher fourth-quarter earnings on Wednesday, Unocal Corp. posted a profit after a year-ago loss. Despite the earnings gain, Mobil said business conditions were "unpredictable" because of Asia's economic crisis, while Unocal, which sold its California operations last year to focus on the Far East, said it remained optimistic about the region.
Mobil said its net income, including a restructuring charge of $105 million for its European operations, rose 5 per cent 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. Operating income fell $70 million to $809 million, or 86 cents per diluted share, from 82 cents a year ago.
Mobil said lower oil prices kept its exploration and production earnings below year-ago levels by $112 million, to $543 million.
Chemicals earnings fell $9 million to $72 million due to tax reasons. Lower crude prices improved margins for its marketing and refining businesses, whose profits rose $64 million to $292 million.
Unocal posted net income of $142 million vs. 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, compared with a loss of $1.97 per share in 1996. Revenues rose to $1.6 billion from $1.4 billion.
Excluding one-time charges, Unocal reported earnings from continuing operations of $134 million, or 55 cents per share, on a continuing basis, compared with $160 million, or 64 cents per share a year ago. The loss reflected lower prices for crude oil and higher domestic and international exploration expenses.
But the earnings hit was offset partly by lower foreign taxes due to the effects of currency devaluation in Asia where Unocal produces oil and gas in Thailand, Malaysia and Indonesia.
"The earnings and cash flow are mostly protected from a foreign exchange perspective, and we remain optimistic about our prospects in Asia," chairman Roger Beach said.
