Quarterly Profits Plunge at Chevron, Arco

Fourth-quarter earnings at two big California oil companies, Chevron Corp. and Atlantic Richfield Co., fell sharply due to the weakest oil prices in 12 years. But both earnings reports, released Monday, beat forecasts.

Chevron, the fourth-largest U.S. oil company, said fourth-quarter net income slid 51% to $431 million, or 66 cents a diluted share, from $875 million, or $1.33, in the year-ago period.

On an operating basis, San Francisco-based Chevron’s earnings fell 38% to $503 million, or 76 cents a share, including foreign-currency losses of $81 million and $115 million in tax benefits, but excluding $72 million worth of one-time charges. In the year-ago quarter, Chevron’s operating earnings were $807 million.

“Our results for the fourth quarter and full-year 1998 reflected very depressed crude oil, natural gas and commodity chemical prices,” Chairman and Chief Executive Ken Derr said.

The benchmark West Texas intermediate crude oil blend has traded at less than $13 per barrel, compared with an average of $17 to $21 per barrel for the last 10 years.

Analysts had been looking for Chevron to post operating earnings of 47 cents per share, according to First Call Corp.

On Monday, Chevron’s stock fell 13 cents to close at $79.88 on the New York Stock Exchange.

Despite a miserable quarter, Los Angeles-based Arco, the No. 6 oil company, also managed to beat analysts’ forecasts, although $864 million in asset write-downs, the result of low oil prices and other charges, pushed it to a loss of $794 million, or $2.47 a share, from a profit a year ago of $382 million, or $1.17.

However, Arco’s operating earnings of $70 million, or 22 cents a share, were solidly ahead of expectations of 4 cents a share.

Arco’s results were attributed to better-than-expected performance at its oil and gas operations and significant cuts in interest expenses.

On Monday, Arco’s stock dropped $1.06 to close at $58.94, also on the NYSE.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* Adaptec Inc., a Milpitas-based maker of cards that link disk drives and other devices to computers, said fiscal third-quarter profit fell 28% to $26.7 million, or 24 cents a share, from profit before charges of $37 million, or 38 cents, a year ago. Adaptec was expected to earn 21 cents. Sales fell 28% to $183.9 million from $254.2 million.

* Camarillo-based AML Communications, citing delays and cancellations of orders, reported a fiscal third-quarter loss of $520,000, or 8 cents per share, on revenue of $2 million, contrasted with net income of $261,000, or 4 cents, on revenue of $3.6 million a year ago.

* CNF Transportation Inc., the Palo Alto-based parent of Emery Worldwide shippers, reported fourth-quarter net income of $32.6 million, or 61 cents per share, compared with $27.3 million, or 58 cents, a year ago. Revenue rose 15% to $1.4 billion from $1.2 billion a year ago.

* Menlo Park-based Consolidated Freightways reported its eighth consecutive profitable quarter, showing a 63.8% increase in fourth-quarter earnings to $11.4 million, or 53 cents per share, on revenue of $569,700, compared with $7 million, or 31 cents, on revenue of $571,600 a year ago.

* Il Fornaio, the Corte Madera-based Italian restaurant chain, reported fourth-quarter net income of $668,000, or 11 cents per share, compared with $695,000, or 11 cents, a year ago. Revenue rose 23.2% to $22.8 million, from $18.5 million a year ago.

* Jenny Craig Inc., based in La Jolla, reported a fiscal second-quarter operating loss of $1.2 million, or 2 cents per share, on revenue of $74.3 million, contrasted with operating income of $160,000, or 1 cent, on revenue of $78.8 million a year ago.

* Santa Clara-based USWeb/CKS Corp., an Internet marketing and Web-design company, said fourth-quarter profit was in line with analysts’ expectations. The company earned $5.9 million, or 7 cents a share, contrasted with a loss of $2.5 million, or 7 cents, a year earlier. Revenue more than doubled, to $72.6 million from $34.9 million.

* La Canada-based retailer Sport Chalet Inc. reported fiscal third-quarter net income of $2.2 million, or 34 cents per share, on sales of $47.2 million, compared with $2.6 million, or 38 cents, on sales of $43.8 million a year ago.

* MORE EARNINGS: C3