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NEWS - Unocal 3Q ignites investors
Unocal 3Q ignites investors
Shares in oil explorer heat up after earnings
dip 69% but still beat Street
October 27, 1998: 10:44 a.m. ET
NEW YORK (CNNfn) - Unocal Corp. shares caught fire on
Tuesday
after the oil-exploration company said the global petroleum
slump had
not impaired third-quarter earnings as much as analysts had
feared.
Excluding a special accounting loss for three oil wells that
went dry in
October, Unocal earned $54 million or 21 cents per share in
the
period, a stark 69-percent plunge from $177 million or 70
cents per
share in the applicable year-ago period.
Counting the $18 million loss, the company reported earnings
of 15
cents per share.
Analysts had forecast a profit of 20 cents per share before
lowering
their estimates to 6 cents per share after a profit warning
Sept. 30.
Unocal stock (UCL) surged on the news, up 1-7/16 at 36-3/8.
Revenue was flat at $1.39 billion, hurt by sagging crude-oil
prices and
lower production caused by storms in the Gulf of Mexico.
"Low commodity prices continued to exert a significant
downward
pressure on our earnings," said chairman and chief executive
officer
Roger C. Beach.
In the current quarter alone, Beach said, the sluggish crude
oil market
had accounted for $70 million in lost profits. The price of
benchmark
Brent blend petroleum has fallen 35 percent from $21 in the
last twelve
months to hover around the $13 per barrel threshold.
However, the company remained optimistic about its ongoing
exploration efforts in Indonesia and the Gulf of Mexico.
For the year to date, Unocal has reported earnings of $159
million or
66 cents per share, again sharply lower than the year-ago
period's
$439 million or $1.73 per share.
________________________________
Related stories
Unocal won't leave Burma
Oil giant under fire, but says human
rights abuse allegations are
unfounded
From Correspondent Casey Wian
January 14, 1997: 8:01 p.m. ET
Pepsi gives
into protests,
leaves Burma
- April 24,
1996
Unocal
Homepage
LOS ANGELES (CNNfn) - Politics and profit
are clashing in Burma where alleged human
rights abuses by the nation's military regime
have convinced several companies to stop
doing business there.
But Unocal is standing firm. The oil giant is
taking heat, but refusing to back down.
Demonstrators chained themselves to a
Unocal tanker truck in Los Angeles, protesting
the company's involvement in a billion dollar
natural gas pipeline project running through
Burma to Thailand.
Unocal's partners include Total, a French oil
company, and the state-owned Mynama Oil
and Gas Enterprise, which has been accused
of involvement in heroin money laundering.
Congress has urged the president to stop
U.S. businesses from investing in Burma.
Local governments, including San Francisco's,
are also pressuring companies to stay out. But
Unocal says that's misguided.
"I think it's bad policy, and I think the way
forward for Burma is to keep open the doors
that have been opened the last several years,
and engage the country constructively and help
them improve their economy and therefore the
economic well being of its people," Unocal
president John Imle said. (WAV, 53K) or
(AIFF, 53K)
Unocal's investment in Burma comes as the
company is in the process of selling its U.S.
refinery and marketing operations. The oil
giant says the rapid growth of Asian countries
like Burma offers greater opportunities for
profit.
But the company's U.S. union, which stands
to lose thousands of jobs, wants the pipeline
project stopped.
"It's about time somebody said, 'Wait,
timeout, you're a creature of law, you're a
creature of this society, and we're going to
hold you accountable, and we're not going to
let you profit on the backs of the indigenous
people all over the world,'" Robert Wages,
president of the Oil, Chemical & Atomic
Workers Union.
"People have talked to Unocal about buying
their investment in the Ydana field, which is the
main field that they're going to produce from,"
Ira Joseph, editor in chief of World Gas
Intelligence, said. "But I don't think Unocal is
going to give up so quickly."
Unocal says it's improving the lives of
people in Burma, by opening medical clinics
and schools and providing agricultural loans,
adding that allegations of human rights abuses
by anyone involved in its project are
unfounded.