Phillips reports first quarter loss

Thursday, April 25th 2002, 12:00 am
By: News On 6

BARTLESVILLE, Okla. (AP) _ Phillips Petroleum Co. reported a first quarter loss Thursday, citing the worst refining conditions in years and lower marketing margins.

The Bartlesville-based company reported a loss of $25 million, or 7 cents per share, compared with net income of $516 million, or $2.01 per share in the same period a year ago.

Earnings were reduced by $18 million dollars in special items, including charges for a property impairment and an insurance settlement, Phillips said.

The company reported a net operating loss of $7 million, or 2 cents per share, for the quarter, exceeding analysts expectations of 4 cents per share. It warned earlier this month that it would post a slight operating loss.

Total revenues were $9.4 billion compared to $5.3 billion a year ago.

Phillips is merging with rival oil company Conoco Inc., a deal that will create the nation's third largest oil company. It is expected to close in the second half of 2002.

``Across the company, we ran our operations well,'' Chief Executive Officer Jim Mulva said. ``However, the weak economic environment that continued from 2001 negatively impacted the quarter's results.''

Mulva said refining margins were well below the ten-year average and marketing margins were 45 percent lower than during the fourth quarter.

Those factors contributed to a net operating loss of $88 million, compared with net operating income of $46 million for the same quarter last year, in the company's refining, marketing and transportation segment.

The company's exploration and production division had a net operating income of $223 million, down from $585 million in the same quarter a year ago. The reduction was driven largely by lower prices for crude oil, natural gas and natural gas liquids, Phillips said.

The chemicals segment, which reflects the company's 50 percent interest in Chevron Phillips Chemical Company, had a net operating loss of $8 million, compared with a $39 million operating loss a year ago.

Sluggish worldwide demand resulted in production cutbacks and low margins in the chemical segment, Phillips said.