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Pipeline Unit Strong, but Oxy Pete's Earnings Slide

February 13, 1987|DONALD WOUTAT

Despite a big boost from its recently acquired pipeline company, Occidental Petroleum said weak prices for oil and gas drove profits down 62% for the October-December quarter and 74% for all of last year.

Even so, Occidental reported a sharp improvement in earnings from operations during the fourth quarter, a period in which its new Chicago-based MidCon subsidiary earned $208.5 million.

Overall, Occidental earned $20.1 million during the quarter versus $52.7 million in the year-earlier period. For the year, the Los Angeles-based oil, gas, pipeline, chemicals and agriculture conglomerate earned $181.1 million, compared to $696 million in 1985.

Revenue, bolstered by the acquisitions of MidCon and Diamond Shamrock Chemicals, rose 10% for the quarter to $4.17 billion and rose 6% for all of 1986, to $15.34 billion.

In both years, earnings included gains from asset sales and other one-time adjustments to earnings. On an operating basis, the acquisition of MidCon in February, 1986, helped offset damage caused by last year's collapse in energy prices.

Oil and gas earnings plunged 58% last year to $348.5 million, but MidCon--one of the nation's largest natural-gas pipeline companies--contributed $404.3 million to the bottom line. Companywide earnings from operations were essentially flat at $964.8 million.

Similarly in October-December, oil and gas earnings fell 34%, but the contributions from MidCon helped send overall earnings from continuing operations up 137% above the same quarter of 1985, to $348 million.

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