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PHILLIPS reports higher second quarter earnings

Updated:
BARTLESVILLE, Okla. (AP) _ Phillips Petroleum Co.'s second-quarter profits rose 37 percent on improved fuel sales margins, higher natural gas prices and increased oil production, the company said Thursday.

Phillips reported net income of $601 million, or $2.33 per share, compared with $439 million, or $1.72 per share, for the same period a year ago.

Those numbers excluded a $17 million gain from favorable settlements and asset sales.

``We had a solid quarter,'' said Jim Mulva, chief executive officer of the Bartlesville-based company. ``Our exploration and production operations were good, and our refining, marketing and transportation segment turned in a very strong quarter.''

Revenue declined to $5 billion compared with $5.4 billion in the second quarter of last year.

Phillips' exploration and production profits increased 27 percent to $504 million on increased worldwide crude oil production and higher U.S. natural gas prices.

Refining, marketing and transportation net operating income was $196 million, up from $86 million, thanks to higher refinery and wholesale marketing motor fuel and distillates margins.

``Our refineries ran at 99 percent of rated crude oil capacity, providing strong operating performance that enabled us to capture the benefits of improved margins,'' Mulva said.

Phillips is in the process of acquiring refiner Tosco Corp. The transaction is expected to be completed in the third quarter.

The company has a 50 percent interest in Chevron Phillips Chemical Co., which reported a net operating loss of $23 million. That compares with net operating income of $51 million a year ago.

Mulva blamed low margins and decreased demand for the chemicals decline.
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