Phillips Petroleum sees revenue decline

Wednesday, October 24th 2001, 12:00 am
By: News On 6

BARTLESVILLE, Okla. (AP) _ Phillips Petroleum Co.'s earnings declined 15 percent in the third quarter as oil and gas prices dipped, the company said Wednesday.

The Bartlesville, Okla.-based company reported net earnings of $364 million, or $1.30 per share, compared with $426 million, or $1.66 per share, for the same period a year ago.

Earnings were reduced by $14 million in special items, Phillips said. Those included costs tied to a chemicals joint venture, work force reduction charges and a loss on the early retirement of debt.

Total revenues were $6.2 billion compared with $5.7 billion a year ago.

Phillips completed its $7 billion acquisition of Tosco Corp. on Sept. 14, making it the second-largest refiner in the country and fifth-largest gas retailer in number of service stations.

``While the events of September 11 created a more difficult business environment in many respects, we are operating well and at full volumes worldwide,'' said Phillips Chief Executive Officer Jim Mulva.

Mulva said the company is positioned for profit growth because of the Tosco acquisition and strong cash flows from operations.

Lower worldwide crude oil prices, lower U.S. natural gas prices and a struggling chemicals sector all hurt profits in the third quarter, Mulva said.

Phillips' third-quarter average worldwide crude oil price was $24.64 per barrel, down from $29.44 for the same period a year ago. The wholesale price of natural gas in the lower 48 states averaged $2.53 per 1,000 cubic feet, versus $3.83 in the third quarter of 2000.

Scheduled maintenance shutdowns in Norway and at the Alpine field in Alaska also put a dent in earnings, Mulva said.

The chemicals segment, which reflects the company's 50 percent interest in Chevron Phillips Chemical Company, reported a net operating loss of $27 million, compared with net operating income of $15 million in the third quarter a year ago.

Mulva said global chemical demand remains depressed, resulting in production cutbacks and low margins.

For the nine months, net operating income was $1.5 billion, or $5.59 per share, versus $1.2 billion, or $4.75 per share, for the same period in 2000. Total revenues were $16.9 billion, up from $16.8 billion a year ago.