Conoco second quarter earnings down 76 percent

Tuesday, July 23rd 2002, 12:00 am
By: News On 6

HOUSTON (AP) _ Conoco Inc. reported Tuesday that second-quarter profit fell 76 percent from a year ago in part because of sharply lower natural gas prices and refining margins.

Houston-based Conoco had net income of $130 million, or 20 cents per share, during the quarter, down from $552 million, or 87 cents per share, a year earlier.

Conoco said it would have earned $141 million, or 22 cents per share, if not for costs associated with its pending merger with Bartlesville, Okla.-based Phillips Petroleum Co. and a revised insurance recovery estimate in connection with an explosion at its Humber Refinery in the United Kingdom last year.

Analysts surveyed by Thomson Financial/First Call were expecting earnings of 34 cents per share.

Conoco shares dropped 12 cents, or less than 1 percent, to $21.78 in trading Tuesday morning in trading on the New York Stock Exchange.

Revenue for the April-June period was $9.6 billion, down 8.5 percent from $10.5 billion in the second quarter of 2001.

``It was a difficult quarter due to weak refining margins, especially in the United States. The relative increase in the cost of heavy crude oil was particularly disadvantageous to Conoco's complex refinery configuration designed to capitalize on lower feedstock costs,'' said Archie Dunham, Conoco's chairman and chief executive officer.

``Although crude oil prices were similar to last year, natural gas prices were significantly depressed versus 2001. We also saw the negative impact of a weakening U.S. dollar on our earnings,'' he said.

Conoco announced plans last November to unite with Phillips and move Phillips' headquarters to Houston in a deal worth $15.6 billion. The merger is expected to close in the third quarter.