Occidental Says Loss Is Less Than Expected

Occidental Petroleum Corp., the 13th-largest U.S. oil company, on Tuesday reported a slightly better-than-expected loss in the fourth quarter after being battered by low profit margins on chemical sales and oil prices that hit 12-year lows.

The Los Angeles-based company’s loss before gains and charges was $35 million, or 11 cents a share, after payment of preferred dividends, compared with profit before charges of $99 million, or 23 cents, in the fourth quarter of 1997.

Occidental, which explores for oil and natural gas in the U.S. and Qatar, was expected to lose 13 cents a share, the average estimate of analysts polled by First Call Corp. Revenue for the quarter fell 11% to $1.7 billion from $1.9 billion last year.

Shares of Occidental fell 25 cents to close at $15.88 on the New York Stock Exchange.

In the quarter, charges of $12 million for taxes and a gain of $9 million from dividend income from investments resulted in a final loss of $38 million, or 12 cents a share.

In the fourth quarter of 1997, a charge of $277 million related to a write-down in the value of oil, natural gas and chemical assets, and a charge of $706 million related to the sale of its MidCon natural gas pipeline to KN Energy Inc., resulted in a final loss of $884 million, or $2.65 a share.

Earnings before special items from the fourth quarter of 1997 have been restated to exclude $44 million from the company’s discontinued MidCon pipeline operations.

Oil prices averaged $12.92 a barrel in the fourth quarter, more than $7 below the year-earlier quarter.

Oxy and larger rivals such as Atlantic Richfield Co. and Texaco Inc. are cutting workers and spending to prepare for what analysts and industry executives expect to be a prolonged slump.

This week, Occidental said its two-year plan to cut annual costs by $200 million, partly through the elimination of more than 1,000 jobs, is on schedule. The company said it’s developing other cost-cutting initiatives to save an additional $100 million a year.

At a Glance

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

* Transamerica Corp., a San Francisco-based insurance and financing company, said fourth-quarter earnings fell 15% from the same period of 1997, when the company had one-time gains of $29.8 million, though its loan portfolio increased by two-thirds.

Transamerica said fourth-quarter earnings, excluding gains on the sale of securities, fell to $125.7 million, or 98 cents a share, from $147.5 million, or $1.13, in the fourth quarter of 1997. The mean estimate of nine analysts surveyed by First Call Corp. was 97 cents. Estimates ranged from 93 cents to $1.

Transamerica attributed the fall in earnings to 22 cents a share in net one-time gains in the fourth quarter of 1997, including a $45.9-million tax benefit.

* Sanwa Bank California, the Los Angeles-based subsidiary of Japan’s Sanwa Bank, said fourth-quarter net income rose 9% to $24.5 million from $22.4 million a year ago. For the year, Sanwa reported record net income of $103.6 million compared with $89.7 million.

MORE EARNINGS: C3