Mixed Earnings for Four Petroleum Companies in Third Quarter of 1994

Strategic Insights -

Despite a slight 8% increase in net profits, four major petroleum companies reported mixed earnings in the third quarter of 1994. Citgo Petroleum Corp. posted a 29% rise in net income from 1993, while Kerr-McGee Corp. reported lower net income but impressive growth in operating profits. Fina Inc. experienced a 29% increase in net earnings, largely driven by better refining margins and improved efficiency at its refineries. Mapco Inc. saw its operating profits fall to $55 million, down from $73.4 million in 1993, due to higher income tax rates and the addition of funds to its environmental and litigation reserves.

Key Takeaways:

  • Citgo Petroleum Corp. reported net income of $52.9 million, up 8% from $48.9 million in 1993, but warned of reduced earnings in the fourth quarter due to refinery margin squeeze, uncertainty surrounding reformulated gasolines, and potential supply shortages.
  • Fina Inc. posted net earnings of $28 million, a 29% increase from $21.7 million in 1993, driven by improved refining margins, efficiency, and productivity at its refineries.
  • Kerr-McGee Corp. recorded a 35% decline in net income to $17.7 million, but posted an operating profit of $62.1 million, up from $48.9 million last year, largely due to increased crude oil sales volumes and prices.
  • Mapco Inc. reported a net income decline of 8% to $24.7 million, with operating profits falling to $55 million from $73.4 million in 1993, primarily due to higher income tax rates and environmental reserves.
  • Fina's chemical earnings jumped 40% for the third quarter compared to last year due to strong demand and increasing margins.
  • Mapco's third-quarter earnings were influenced by the acquisition of Emro Propane, which was completed on September 1, and the disposal of non-strategic assets from its gasoline and convenience store operations.

Statistics:

  • Citgo's net income increased 8% to $52.9 million in the third quarter of 1994, while revenues rose to $2.5 billion from $2.4 billion in 1993.
  • Fina's net earnings improved by 29% to $28 million from $21.7 million in 1993.
  • Kerr-McGee's exploration and production (E&P) operations posted operating profits of $30.3 million, up 41% from $21.4 million in 1993.
  • Mapco's operating profits declined by 25% to $55 million from $73.4 million in 1993.
  • Fina's chemical earnings surged 40% to $25 million in the third quarter compared to last year.

Sources:

  • "Citgo Petroleum Corp."
  • "Fina Inc."
  • "Kerr-McGee Corp."
  • "Mapco Inc."