Business
August 21, 2006 - Volume 84, Number 34
- p. 28
Oil Companies
Chemical Earnings Rise In Quarter For Four Of Five Firms
William J. Storck
Like chemical companies, oil producers largely saw earnings growth in the second quarter from their chemical operations. The five companies surveyed turned in a combined $1.3 billion in earnings, up 6.5% from second-quarter 2005.
This growth, however, was not enough to overcome a 15.9% earnings decline in the January-through-March quarter. Thus, combined earnings for the first half were $2.81 billion, down 3.7%. Except for Occidental Petroleum, the oil companies do not give sales data for their chemical operations.
ConocoPhillips' second-quarter chemical earnings rose 63.5% to $103 million, the largest percentage increase among the oil group. According to the company, the increase came largely from higher olefins and polyolefins margins and volumes, partially offset by negative impacts from recent tax legislation.
Chevron, Conoco's partner in Chevron Phillips Chemical, had an 11.9% earnings increase to $94.0 million, with the improvement coming from both the joint venture and from Chevron's Oronite subsidiary.
ExxonMobil, which has the largest chemical operations of the oil group, managed just a 3.2% increase in chemical earnings to $840 million. The company says prime product sales of these operations totaled 6.96 million metric tons, up 3.9% from the comparable quarter last year.
Earnings from chemicals at Occidental Petroleum rose 11.1% to $250 million, with the improvement coming from higher chlor-alkali volumes. Oxy's chemical sales increased 12.9% to $1.27 billion.
The only decline for the group was at Sunoco, as earnings fell 73.3% to $8.0 million. The firm says the drop was primarily the result of lower margins for phenol and polypropylene, partially offset by higher volumes, lower expenses, and a deferred tax benefit.
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- Chemical & Engineering News
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- A Modest Rise For Chemical Earnings Most firms show increases, but total growth was just 0.4% at 24 companies