Occidental Petroleum joined the ranks of other major oil companies posting sharply lower profits because of plunging oil prices.
Los Angeles-based Occidental, the nation's 11th-largest oil producer, said Thursday that its net plummeted by 67% to $47.7 million on revenue of $3.83 billion in the second quarter, compared to a year earlier, when it earned $145.9 million on revenue of $3.68 billion.
For the half, Occidental's income dropped 53% to $121.9 million on revenue of $7.46 billion, compared to the year-ago period, when it netted $261.6 million on revenue of $7.38 billion.
Had fossil fuel prices remained at year-ago levels, Occidental's oil and gas earnings would have been $230 million higher, said Armand Hammer, the company's chairman and chief executive.
"However, with only an estimated seven-year supply of (oil) reserves in the United States at present rates of production . . . the price of oil may be down temporarily, but it won't stay down," Hammer said.
"When the oil price recovery takes place, Occidental will be well-positioned for a substantial earnings increase because of the significant reduction in preferred dividends and improvement in operational efficiency."
Occidental reduced its preferred dividend payments in the second quarter to $19.5 million, compared to $70.3 million a year earlier. Since last year, the company has redeemed $1.43 billion in preferred stock.
The company also has furloughed more than 2,000 workers since January and has said it expects that number to rise to 3,500 by year-end. Occidental has about 50,000 employees worldwide.
Operating earnings from Occidental's oil and gas units dropped to $97.5 million for the second quarter from $210.6 million a year earlier. For the half, they were down to $273.5 million from $383 million.
Its coal operations showed a profit of $18.1 million for the quarter and $19 million for the half. In 1985, it lost $2.9 million in the second quarter and $12.7 million for the half.
Its chemical and agribusiness units showed slightly improved results.
Occidental also posted operating earnings from its Midcon subsidiary of $83.1 million in the second quarter and $127.5 million for the half. Occidental did not own Midcon last year.
Occidental's interest expense rose by 81% to $251 million in the second quarter and by 55% to $451.4 million for the half because of the company's $3-billion acquisition of Midcon.