Strong Earnings for Major Oil Companies in Q1 1995

Strategic Insights -

Despite weak downstream margins and low natural gas prices, five major oil companies, including Amoco Corp., Atlantic Richfield Co. (Arco), Exxon Corp., Mobil Corp., and Texaco Inc., reported first-quarter earnings that exceeded analysts' expectations. The companies' strong oil prices and outstanding upstream and chemicals operations helped drive their earnings above predictions.

Key Takeaways:

  • Amoco Corp. reported net income of $523 million, a 31.5% increase from $398 million in the same quarter last year, with earnings per share of $1.05, exceeding analysts' consensus estimate of 89 cents.
  • Atlantic Richfield Co. (Arco) more than doubled its earnings for the period, posting $322 million, compared to $149 million in 1994, with earnings per share of $1.97, surpassing analysts' consensus estimate of $1.77.
  • Exxon Corp. reported net income of $1.6 billion, a 45.5% increase from $1.1 billion in the same quarter last year, with earnings per share of $1.33, exceeding analysts' consensus estimate of $1.04.
  • Mobil Corp. reported net income of $636 million, a 18.5% increase from $535 million in the same quarter last year, excluding a $680 million charge in 1994, with earnings per share of $1.57, meeting analysts' consensus estimate of $1.45.
  • Texaco Inc. reported net income of $301 million, a 49% increase from $202 million in the same quarter last year, with earnings per share of $1.10, exceeding analysts' consensus estimate of 84 cents.
  • Amoco saved more than $100 million in the first quarter from restructuring efforts, aiming to eliminate 3,800 jobs and take out $600 million in annualized costs by the end of the year.

Statistics:

  • Amoco's rate of return on shareholders' equity was 13.5%, down from 14.9% in the same period last year, with a rate of return on capital of 10.8%, down from 11.5%.
  • Arco's average price for U.S. crude was $11.87/bbl, up from $7.83/bbl, and the average domestic natural gas price was $1.33/Mcf, down from $2.09/Mcf.
  • Exxon's earnings increased due to the improvement in the operating performance of most of its business segments, with refining and marketing earnings of $200 million, down from $388 million last year.
  • Mobil's average U.S. price of crude was $14.28/bbl, up from $10.19/bbl, and the average natural gas price was $1.48/Mcf, down from $2.28/Mcf.
  • Texaco's U.S. E&P operations posted $143 million in earnings, up from $75 million last year, and international E&P operations reported $82 million in earnings, up from $45 million last year.

Sources:

  • "Amoco Posts 31.5% Gain in First-Quarter Earnings." (Name of publication not provided, no date specified)
  • "Arco's Earnings Double in First Quarter." (Name of publication not provided, no date specified)
  • "Exxon Posts 45.5% Gain in First-Quarter Earnings." (Name of publication not provided, no date specified)
  • "Mobil Posts 18.5% Increase in First-Quarter Earnings." (Name of publication not provided, no date specified)
  • "Texaco Posts 49% Gain in First-Quarter Earnings." (Name of publication not provided, no date specified)