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First-quarter results from chemical operations at five U.S. oil companies were nothing to get excited about, with three showing relatively modest earnings gains and the other two posting declines.
As a group, the five companies saw their total chemical earnings fall 15.9% from the first quarter last year to $1.51 billion in the first quarter of 2006. The oil companies traditionally give no information regarding chemical sales.
Oddly, the two declines came from the largest company and the smallest ExxonMobil and Sunoco. Earnings from chemical operations at ExxonMobil declined 26.0%, from what the company said was its best quarter for chemicals ever, to $949 million. The decline was primarily due to reduced margins.
Sunoco's chemical earnings dropped 57.6% to just $14 million. The decrease, the company said, resulted mainly from lower margins for both phenol and polypropylene and higher expenses, including fuel and utility costs.
Of the three companies with higher chemical earnings, Occidental Petroleum led with a 15.9% rise to $248 million. The improvement came, the company says, from increased volumes in chlor-alkalis and higher margins in chlor-alkalis and polyvinyl chloride, resulting from higher sales prices that were partially offset by higher energy and feedstock costs.
Chemical earnings were up 12.0% at ConocoPhillips to $149 million. The increase from the first quarter last year came largely from improved olefin and polyolefin margins and the recognition of a business interruption claim. It was in part offset by lower margins for aromatics and styrenics.
At Chevron, earnings from chemicals totaled $153 million, an 11.7% increase from the year-earlier quarter. Again, the improvement came from higher margins in olefins and polyolefins and for additives sold by Chevon's Oronite subsidiary for use in fuels and lubrication oils.
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