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Chevron Profit Edges Up; Phillips' Dips

April 30, 1986

Chevron Corp. said Tuesday that its first-quarter earnings rose by less than 1% over the same period a year ago. Chevron, the nation's No. 4 oil company, said it netted $356 million, compared to $354 million in the same period of 1985.

The San Francisco-based company, which acquired Gulf Corp. last year, said its revenue totaled $8.9 billion, down sharply from the $12.6 billion of early 1985.

Most of this was due to significantly lower prices for crude oil and petroleum products, while the rest was attributable to the absence of some revenue generated by assets sold last year and to lower volumes, the company said.

Among the assets sold were Gulf's Southeast refining and marketing operations and Gulf Canada.

Chairman George M. Keller said the latest earnings reflected reduced domestic exploration and producing results, offset by improved marketing and refining, chemical and mineral earnings.

"Although first-quarter earnings were comparable to last year, most of the earnings occurred in the first two months," he observed.

Accordingly, if crude prices remain at current levels, Keller said the company expects that its future earnings, particularly for exploration and producing operations, will be substantially lower.

Sales of assets minus write-offs added $36 million to the company's earnings, officials said. Sales of various properties brought in $48 million, which was offset by $12 million in shutdown costs for two domestic refineries.

There were no major asset sales in the first quarter of 1985.

Phillips Petroleum, the eighth-largest oil firm, reported quarterly earnings of $96 million, down 15% from last year's $113 million. Phillips, which is based in Bartlesville, Okla., had first-quarter revenue of $3.11 billion, down from $3.97 billion in the year-ago period, officials said.

"Lower crude oil prices and lower production in 1986 resulted in a $79-million (negative) impact on earnings," said Phillips Chairman and Chief Executive C. J. Silas at Phillips' annual shareholders meeting in Houston.

Other negative factors influencing 1986 first-quarter earnings were higher interest and exploration expenses, Silas said.

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