Mobil Corporation Reports Second Quarter 1995 Operating Income of $706 Million

Strategic Insights -

Mobil Corporation reported a significant increase in operating income for the second quarter of 1995, with estimated earnings per common share of $0.42 compared to $0.46 in the same quarter last year. The company's Chairman, Lucio A. Noto, attributed the increase to higher income in the Chemical business due to improved industry conditions and better operating performance. Mobil also announced plans to realign its worldwide staff support services and further restructure marketing and refining operations in the United States and Europe, which is expected to result in a worldwide workforce reduction of over 5,000 positions and pre-tax savings of over $1 billion annually.

Key Takeaways:

  • Mobil Corporation reported estimated second quarter 1995 operating income of $706 million, up $193 million, or 38%, from the comparable quarter last year.
  • The company's Chairman, Lucio A. Noto, attributed the increase to higher income in the Chemical business due to improved industry conditions and better operating performance.
  • Mobil announced plans to realign its worldwide staff support services and further restructure marketing and refining operations in the United States and Europe, which is expected to result in a worldwide workforce reduction of over 5,000 positions and pre-tax savings of over $1 billion annually.
  • The company reported higher crude oil prices, up more than $2.00/bbl from last year's depressed levels, and lower expenses in Exploration and Producing, which more than offset the impact of lower natural gas prices in North America and the United Kingdom.
  • Marketing and Refining income of $240 million was $16 million higher, due to lower operating expenses, higher sales volumes, and increased lube income in the United States, as well as benefits from ongoing business initiatives in Europe.
  • Chemical income of $186 million was a record quarter, up $147 million, largely due to better industry fundamentals in most businesses, particularly polyethylene resin.
  • Mobil's estimated Return on Average Shareholders' Equity for the twelve months ended June 30, 1995, was 10.7%, compared with 10.4% for 1994.
  • The company's estimated Debt to Capitalization Ratio was 30% at June 30, 1995 and 31% at December 31, 1994.

Statistics:

  • Estimated second quarter 1995 operating income: $706 million
  • Estimated return on average shareholders' equity for the twelve months ended June 30, 1995: 10.7%
  • Estimated debt to capitalization ratio at June 30, 1995: 30%
  • Worldwide capital and exploration expenditures for the second quarter of 1995: estimated at $960 million, an increase of $13 million from the comparable period last year
  • Common stock dividends for the second quarter of 1995: $0.925 per share
  • Total special charges for the realignment of worldwide staff support services and restructuring of marketing and refining operations in the United States and Europe: $527 million

Sources:

  • Mobil Corporation press release, July 24, 1995
  • Mobil Corporation financial statements, June 30, 1995
  • Business Wire, July 24, 1995