LOS ANGELES, Apr. 20, 1999, (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE: OXY) today reported a net loss of $70 million ($.21 per share) for the first quarter of 1999, compared with net income of $177 million ($.50 per share) for the first quarter of 1998. The first quarter of 1999 included an after-tax charge of $13 million ($.04 per share), reflecting the cumulative effect of adopting accounting changes mandated by the American Institute of Certified Public Accountants and the Emerging Issues Task Force of the Financial Accounting Standards Board. The first quarter of 1998 included an after-tax benefit of $38 million ($.11 per share) as income from discontinued operations from the sale of MidCon Corp. Results before special items were a loss of $68 million for the first quarter of 1999, compared with earnings before special items of $89 million for the first quarter of 1998. Sales were $1.3 billion for the first quarter of 1999, compared with $1.7 billion for the same period in 1998.
In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, stated, "First quarter 1999 results reflected lower oil and gas prices and lower chemical margins compared to the same quarter in 1998. The recent rise in oil prices, if sustained, should have a significant impact on our earnings as Occidental has become more leveraged to changes in oil prices. In our chemical business, we have also seen a recent improvement in EDC and PVC demand and prices."
Oil and gas divisional earnings before special items were $63 million for the first quarter of 1999, compared with $127 million for the first quarter of 1998. Results for the first quarter of 1998 were $232 million after including pretax gains of $105 million relating to the sale of nonstrategic assets. The decrease in earnings before special items reflects the impact of lower worldwide crude oil and natural gas prices. This decrease was partially offset by increased international production and lower costs.
Chemical divisional earnings for the first quarter of 1999 were $9 million, compared with $158 million for 1998. The decline in 1999 earnings resulted from lower prices in chlorine, caustic soda, PVC and petrochemical products, which were partially offset by lower raw material costs.
Unallocated corporate other expenses were $16 million for the first quarter of 1999, compared with $13 million for 1998. Included in the 1999 expense was pretax income of $18 million from an insurance dividend and $8 million of expense for distributions related to the Trust Preferred Securities issued by a subsidiary trust of Occidental in January 1999. Additionally, there were lower results from equity income of unconsolidated entities.
SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
First Quarter
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Periods Ended March 31 1999 1998
Divisional net sales
Oil and gas $ 746 $ 740
Chemical 598 960
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$ 1,344 $ 1,700
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Divisional earnings
Oil and gas $ 63 $ 232
Chemical 9 158
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72 390
Unallocated corporate items
Interest expense, net (116) (112)
Income taxes (a) 3 (126)
Other (16) (13)
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Income (loss) from continuing operations (57) 139
Discontinued operations, net - 38
Cumulative effect of changes in accounting
principles, net (b) (13) -
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Net income (loss) (70) 177
Preferred dividends (4) (4)
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Earnings (loss) applicable to common stock $ (74) $ 173
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Basic earnings (loss) per common share
Income (loss) from continuing operations $ (.17) $ .39
Discontinued operations, net - .11
Cumulative effect of changes in accounting
principles, net (b) (.04) -
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Basic earnings (loss) per common share $ (.21) $ .50
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Diluted earnings (loss) per common share
Income (loss) from continuing operations $ (.17) $ .38
Discontinued operations, net - .11
Cumulative effect of changes in accounting
principles, net (b) (.04) -
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Diluted earnings (loss) per common share $ (.21) $ .49
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Average common shares outstanding 347.8 344.5
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See footnotes on following page.
SUMMARY OF OPERATING STATISTICS
First Quarter
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Periods Ended March 31 1999 1998
Net oil, gas and liquids production per day
United States
Crude oil and condensate (thousands of barrels) 66 81
Natural gas liquids (thousands of barrels) 9 6
Natural gas (millions of cubic feet) 647 628
Other Western Hemisphere
Crude oil and condensate (thousands of barrels) 102 93
Eastern Hemisphere
Crude oil and condensate (thousands of barrels) 144 131
Natural gas (millions of cubic feet) 53 138
Capital expenditures (millions) $ 132 $ 280
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Depreciation, depletion and
amortization of assets (millions) $ 197 $ 230
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(a) Includes an offset for credits in lieu of U.S. federal income taxes
allocated to the divisions. Divisional earnings have benefited from
credits allocated by $2 million and $4 million at oil and gas and
chemical, respectively, in the first quarter of 1999 and by $3 million
and $7 million at oil and gas and chemical, respectively, in the first
quarter of 1998.
(b) Reflects the adoption of SOP 98-5 "Reporting on the Costs of Start-
Up Activities", which requires expensing of start-up costs as incurred
and those costs that are currently capitalized at date of adoption. The
impact of SOP 98-5 is a $15 million charge which is net of an $8 million
income tax benefit. Also reflects the adoption of EITF 98-10
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities", which requires energy trading contracts to be marked to
market. The impact of EITF 98-10 is a $2 million credit which is net of
a $1 million income tax charge.
CONTACT: Howard Collins (media)
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Kenneth J. Huffman (investors)
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