Exxon, Shell and Oxy All Report Gains in Quarter : Pennzoil, Phillips Profits Decline From a Year Ago

Exxon, Shell Oil and Occidental Petroleum reported higher second-quarter profits Friday, while Phillips Petroleum and Pennzoil said their quarterly profits were lower.

Some of the companies said they were affected by depressed refined-product margins but helped by a rebound in oil prices, which a year ago averaged between $13 and $14 per 42-gallon barrel.

New York-based Exxon, the world’s largest oil company, said its net income totaled $1.15 billion, up 3% from $1.11 billion in the 1986 second quarter. Revenue rose to $20.16 billion, up 12% from a year ago.

Exxon said that higher crude oil prices helped boost its earnings in exploration and production, but also reduced profit margins in refining and marketing.

Exploration and production operations earned $886 million, a 65% jump from the same period in 1986. But refining and marketing operations just about broke even, contributing just $19 million in earnings compared to $566 million in 1986.

Shell Profit Rose

Number six Shell, headquartered in Houston, said its second-quarter profit rose to $266 million on revenue of $5.18 billion compared to last year’s profit $219 million on $4.16 billion of revenue.

Shell Oil, the U.S. affiliate of Royal Dutch/Shell Group, said its earnings were boosted by the rise in crude prices and higher earnings in its chemicals division. Occidental Petroleum, the nation’s seventh largest oil company, said it earned $59 million in the second quarter, up 23% from $48 million in the year-ago quarter. Revenue rose 13% to $4.32 billion from $3.82 billion.

The most recent period included an after-tax gain of $81 million as part of its 1985 sale of half of its big Colombian oil discovery to Royal Dutch-Shell Group.

Excluding the gain, net income would have declined.

The 1986 results included special after-tax gains of $44 million.

The Los Angeles-based concern’s oil and gas division reported a 28.6% increase in operating profit, including the gain from the Colombian sale. Higher crude oil prices were offset by lower volume.

Phillips Off 63%

Operating profit from the chemicals segment rose 104% to $51 million, primarily because of the acquisition of Diamond Shamrock Chemicals last September.

The company’s natural-gas pipeline unit posted an operating profit decline of 14.5% to $71 million and its coal segment had an by 83.3% to $3 million.

Profit of its agribusiness division, composed primarily of IBP Inc., formerly known as Iowa Beef Processors, was off by 10.5% to $17 million despite higher revenue.

Phillips Petroleum, ranked 12th and based in Bartlesville, Okla., said its quarterly income fell nearly 63%, to $3 million, on revenue of $2.64 billion.

Houston-based Pennzoil said its second-quarter net income for the three months ended June 30 was $7.4 million, down from $25.2 million. Revenue totaled $443 million compared to last year’s $485 million.