Unocal reports $49 million earnings for fourth quarter
El Segundo, Calif., Jan. 25, 1996 -- Unocal Corporation today reported fourth-quarter 1995 net earnings of $49 million, or 16 cents per common share, compared with a loss of $68 million, or 32 cents per common share, in the same period a year ago. Fourth quarter revenues were $2.22 billion, compared with $1.98 billion a year ago.
Earnings from operations for the fourth quarter 1995, excluding special items (detailed in the attached tables), were $92 million, or 34 cents per common share. This compares with operating earnings of $86 million, or 32 cents per common share, for the fourth quarter 1994.
"Our fourth quarter earnings benefited from a 5 percent increase in domestic natural gas production, record natural gas production levels in Thailand in late November and early December, and higher refinery production of light oil products," said Roger C. Beach, Unocal's chairman and chief executive officer. "The effect of the increased gas production was magnified by stronger worldwide natural gas prices."
The gain in natural gas prices in the quarter had the greatest impact in the U.S. Gulf Coast, a strategic focus area for Unocal. Approximately 40 percent of Unocal's worldwide natural gas production comes from this area.
Beach added that the gains in natural gas production were more than offset by continuing declines in U.S. and foreign crude oil production. "In the U.S., the decline in crude oil production reflects the sale of non-strategic domestic properties and natural gas production declines in California and the Central U.S.," he said.
For 1996, the company expects domestic natural gas production to be lower, reflecting the expected sale of its California upstream operations. Increases in Unocal's foreign gas production, principally in Thailand, should more than offset the decline in domestic natural gas production.
Unocal's 76 Products Company continued to show improvements in earnings and cash flow in the quarter. The earnings performance was helped in part by higher production of gasoline, jet fuel and diesel at the company's refineries.
The company's agricultural products business unit continued its strong performance in the fourth quarter with higher earnings from nitrogen-based fertilizers sales in the U.S. West Coast and Pacific Rim. Higher commodity prices significantly enhanced margins for the company's agricultural products.
The company's reported earnings for the fourth quarter included a non-cash, after-tax charge of $53 million (detailed in special adjustments table) for adoption of Statement of Financial Accounting Standards No. 121. This new accounting standard, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," requires that long-lived assets with book values that cannot be recovered by estimated future undiscounted cash flows be written down to fair value. The impairment provision in the fourth quarter was related principally to 1995 reserve write-downs for oil and gas properties in the U.S., Canada and The Netherlands.
The reported fourth quarter earnings also included one-time cash benefits from a bankruptcy settlement with Columbia Gas Transmission Corp. and the sale of oil and gas properties in Wyoming.
For the full year 1995, net earnings were $260 million, or 91 cents per common share. This compares with a loss of $153 million, or 78 cents per common share, for 1994. Full-year revenues were $8.43 billion, up from $7.97 billion last year.
Earnings from operations for 1995, excluding special items (detailed in the attached tables), were $297 million, or $1.06 per common share. This compares with adjusted earnings of $300 million, or $1.09 per common share, in 1994.
Updated: January 1996