Exxon, the world's largest oil company, said Monday that its profit fell 10.2% in the first quarter of 1985 from the year-ago period, Standard Oil (Indiana) reported a 20.4% decline and Atlantic Richfield earnings fell 10.9%.
The companies blamed the lower profits on sluggish markets for oil products, a slowing economy and a strong dollar.
The results were the first figures for the period from the oil industry and generally were in line with analysts' expectations of a slump from a year earlier, when the industry's profit had surged higher as a result of a robust economic expansion and a cold winter.
Exxon, Indiana Standard and Arco also had continued multibillion-dollar stock buy-back programs during the first three months of the year, which substantially reduced the number of shares outstanding and, in consequence, kept earnings per share from falling as far as net income.
Exxon said earnings in the first quarter fell to $1.325 billion from $1.475 billion a year earlier. Revenue fell 7.3% to $23.099 billion from $24.096 billion a year earlier.
"The first quarter reflected a continuation of the slower economic growth of the last half of 1984 in contrast to the strong first quarter last year," Exxon Chairman Clifton C. Garvin Jr. said.
In addition, demand for oil remained well below the industry's production capacity, something that contributed to a slump in oil prices to five-year lows in late January. Prices began recovering in February but not enough to offset earlier losses from the refining and marketing of petroleum products, such as gasoline.
"For Exxon, earnings from exploration and production operations improved with higher worldwide natural gas earnings and a 3% increase in overseas crude oil production," Garvin said. "However, this improvement was more than offset by lower refining and marketing and chemicals results, reflecting the unfavorable market conditions relative to last year."
Refining Profits Down
Exxon said earnings from worldwide refining and marketing fell 83.6% from a year earlier, dropping to $29 million from $177 million.
Indiana Standard reported a 90.9% fall in refining and marketing.
Garvin also said the dollar's climb during most of the quarter put further pressure on profit margins from overseas refining and marketing. But he noted that the dollar has been falling in recent weeks.
In the first quarter, Exxon said it repurchased 17.443 million shares of its common stock at a cost of $824 million.
Since it began the repurchase program in July, 1983, Exxon has spent more than $4.3 billion to buy more than 100 million shares of its stock. It still has 766.1 million shares of stock outstanding.
Indiana Standard, which today is asking shareholders to change the company's name to Amoco Corp., said first-quarter earnings fell to $473 million from $594 million a year earlier. Revenue fell 6.7% to $7 billion from $7.5 billion.
Richard M. Morrow, the company's chairman, said the reduced profits primarily reflected lower production of crude oil and natural gas, increased exploration expenses overseas and intense competition for sales of refined petroleum products in the United States.
Share Repurchase Program
Indiana Standard said it spent $249 million during the first three months of the year to buy 4.1 million shares of its stock.
Since beginning the program in May, 1984, the company has purchased 25.6 million shares for $1.5 billion. There are still about 268.6 million shares outstanding.
Arco said earnings fell to $352 million from $395 million. Revenue fell 10.4% to $5.82 billion from $6.49 billion.
William Kieschnick, Arco's president, attributed the decline to lower oil prices, a drop in profit margins and sales volumes of its chemical unit and increased depletion and exploratory expenses.
While Exxon and Indiana Standard reported sharp declines in refining and marketing, Arco said its operations recorded a 16.7% gain in the first quarter.