Advertisement

EARNINGS

Oxy Net Up in '85; Schlumberger's Falls

February 11, 1986|BILL RITTER

Occidental Petroleum on Monday reported net earnings were off by 71% in the fourth quarter but up by 22% for the year, with most of the changes attributed to gains from the sale of assets.

Schlumberger Ltd., a New York-based oil field services company, reported a loss of $372.6 million in the final quarter of 1985, compared to a profit of $311.1 million a year earlier. Without $486 million in fourth-quarter charges relating to its Fairchild Semiconductor Group, however, the company would have earned $113 million, it said.

Occidental reported net income of $52.7 million on revenue of $3.78 billion for the three months ended Dec. 31, down from a year earlier when it earned $184.2 million on revenue of $4 billion.

For all of 1985, the company earned $696 million on revenue of $14.53 billion, compared to 1984 when it earned $568.7 million on revenue of $15.59 billion.

Schlumberger said its 1985 net income was $351 million, down sharply from the $1.18 billion it reported for 1984. Without total non-recurring charges of $511 million relating to Fairchild Semiconductor, Schlumberger said its net income would have been $862 million, down 27%.

Those charges included the write-off of the balance of goodwill of $250 million, a provision of $106 million for disposal of assets and $81 million for consolidation of production facilities, the company said. Goodwill represents intangible assets, including such things as a company's reputation and its relations with customers.

Schlumberger's quarterly revenue was down 2% to $1.67 billion from $1.70 billion a year earlier. The company's total 1985 revenue increased 3% to $6.56 billion from $6.37 billion.

Michael Vaillaud, chairman, said Schlumberger's quarterly and yearly net earnings declines, as well as the non-recurring charges, were due mostly to losses at Fairchild Semiconductor, lower earnings at its Wireline Services Group and to losses at Sedco Forex division and Computer Aided Systems Group.

Occidental said its earnings last year included gains of $479.2 million on the sale of foreign and domestic oil and gas operations, including half of its Colombian holdings and 25% of its holdings in Libya. Of that amount, $22.8 million occured in the fourth quarter.

By contrast, the company's 1984 income included gains of about $314 million from the sale of assets, including $135 million from the sale of geothermal operations in the fourth quarter.

Occidental attributed lower revenue to declining crude oil prices.

The company also said it had a loss on its operations in Peru, after the government of that country in August canceled contracts under which Occidental had been operating and substantially reduced the compensation the company was earning.

Last December, after months of negotiations, Occidental and Peru reached a tentative agreement setting new compensation rules but also granting Occidental the right to explore a vast, undeveloped area of the Peruvian jungle.

Occidental's chemical and coal operations showed significant turnarounds.

Advertisement
Los Angeles Times Articles
|
|
|