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Oil Companies

Chemical Earnings Fell At Three Of Five Firms In Second Quarter

by William J. Storck
August 20, 2007 | APPEARED IN VOLUME 85, ISSUE 34


Earnings were advancing pretty well among chemical companies, but the same could hardly be said for chemical operations at five major oil producers. Three of the five had significant declines in their chemical earnings, and together, the five companies saw an aggregate gain that was less than half that for the 25 chemical companies C&EN surveys. The second quarter of 2007 was better than the first, however, when ExxonMobil was the only firm to post higher earnings than in the same period one year before.

The five companies together had an earnings gain of 4.1% to $1.35 billion. The earnings gain was significantly lower than the 8.2% rise in the first quarter, but that increase was totally due to the a 30.2% boost at ExxonMobil, while the four other companies had declines ranging from 16.3 to 45.2%.

ExxonMobil, which has the largest chemical operations among the companies, posted earnings of $1.01 billion in the three-month period ending in June, a gain of 20.6% over the comparable period in 2006. The company does not give a dollar figure for sales; however, sales volume at ExxonMobil was up just 0.6% to about 6.9 million metric tons.

Chevron, the other company with positive results, increased its chemical earnings by 10.6% to $104.0 million. The company notes that earnings benefited from improved margins on sales of lubricants and fuel additives by its Oronite subsidiary. This, however, was largely offset by lower margins on sales by the firm's jointly owned Chevron Phillips Chemical.

Chemical earnings at ConocoPhillips, which owns the other half of the joint venture, fell 34.0% to $68.0 million. The decline from second-quarter 2006, according to the company, was largely due to lower olefins and polyolefins operating margins and the costs of an asset retirement.

Occidental Petroleum had the greatest percentage decline in chemical earnings, falling 37.1% to $158.0 million. The second-quarter fall came from lower margins for the firm's chlorovinyls products. Occidental, the only one of the five companies to report chemical sales saw this number decline by 3.5% to $1.23 billion.

Sunoco, which has the smallest chemical operations among the five companies, had a 25.0% drop in earnings to $6.0 million. Slightly higher operating margins were offset by higher expenses, according to the company.

More on this Topic

  • Chemical Earnings Show Increase
  • Aggregate rise in earnings among 25 chemical firms was 11.3% in the second quarter, with 18 companies seeing higher results
  • Oil Companies
  • Chemical Earnings Fell At Three Of Five Firms In Second Quarter
  • Top 10 Rankings
  • Chemical company leaders for the second quarter ...
    ... and for the first six months of 2007



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