URL: www.thestreet.com By Melissa Davis Staff Reporter 01/29/2003 04:32 PM EST

The marriage of Conoco and Phillips is off to a bit of a rocky start.

The Houston-based energy giant, now known as ConocoPhillips (COP:NYSE - news - commentary) , recorded a slew of restructuring charges during its first full quarter as a united entity. The company also weathered setbacks in Venezuela, where a crippling oil strike continues to chomp away at the company's bottom line.

After taking more than $1 billion in restructuring charges -- part of a big-picture plan to capitalize on synergies -- ConocoPhillips posted a fourth-quarter loss of $410 million, or 60 cents a share. Excluding special items, ConocoPhillips reported fourth-quarter profits of $1.10 a share that fell a penny shy of analysts' lowest expectations.

Nevertheless, ConocoPhillips CEO Jim Mulva declared the company's honeymoon quarter an overall success, and investors appeared to agree, boosting the stock 4%.

"We're making good progress executing our strategic plan," Mulva told analysts during a conference call on Wednesday. "We're building a new company with very high expectations to improve our competitive positions."

But for now, the company must fight through some unexpected challenges as it pursues that long-term bliss. Namely, it's trying to overcome a Venezuela strike that could slash future earnings by up to $50 million a month.

ConocoPhillips expects to make no money in Venezuela -- normally a top international producer -- during the first quarter of this year. Even if the strike there ends shortly, as some are optimistically predicting, the company would need a month or two to ramp up production to normal levels. In the meantime, the company's refinery margins -- tied to oil supplies and prices -- could also take a hit.

Analysts on Wednesday were fixated on the situation in Venezuela. But more broadly, they were hunting for signs that the ConocoPhillips merger will prove to be a successful one.

In spite of the challenges -- and some lingering skepticism from analysts -- ConocoPhillips promised to deliver.

"We are moving forward with our plan to improve the returns of each of our business lines," Mulva stated. "We will report our progress in capturing synergies beginning in our first-quarter 2003 results."

Mulva promised an initial update next month.

In the meantime, shares of ConocoPhillips surged ahead $2.10, to $48.01 in Wednesday trading. The stock is selling at the low end of its 52-week range of $44.03 to $64.10.

orlando.bizjournals.com 15:36 EST Wednesday 

Economic development agency Enterprise Florida has shed 22 jobs this month in response to a funding shortfall.

Thirteen workers lost their jobs and nine vacant positions were eliminated in the January cuts. Cuts were made in Orlando, Tallahassee and Miami.

The quasi-public agency receives 43 percent of its funding from a $2-a-day state fee on rental cars.

The agency was told to expect a $1.6 million shortfall from those funds, says Kim Prunty, a spokeswoman for Orlando-based Enterprise Florida.

Additionally, the agency interrupted contracts with six international offices in Taiwan, Venezuela, Israel, South Africa, Japan and Korea.

Sign up to receive free daily business updates by email every weekday afternoon. Use Search Watch to watch for related topics, companies. Receive free Industry News via email. Choose from 46 different industries.

But Prunty says Enterprise Florida is now hopeful that three or four of those operations could continue.

Next year's funding looks better for the agency. In the governor's proposed budget, Enterprise Florida would receive the full amount it was to receive this year, before the $1.6 million shortfall.

reuters.com Wed January 29, 2003 04:20 PM ET By Carolyn Koo

NEW YORK (Reuters) - ConocoPhillips COP.N , the No. 3 oil company, on Wednesday posted a fourth-quarter loss after more than $1 billion in charges wiped out the benefit of a sharp rise in crude oil and natural gas prices.

The hike in energy prices did, however, lift profits at smaller oil companies Occidental Petroleum Corp. OXY.N and Unocal Corp. UCL.N and should make for a solid round of fourth-quarter results from others in the energy industry.

Crude oil prices in the quarter were up more than 40 percent from a year-ago, driven by fears of a potential war in Iraq, a strike in Venezuela, the world's fifth-largest exporter of oil, and increasing U.S. demand for petroleum products during a frigid winter.

If oil prices continue to rally, first-quarter earnings could be even stronger. "The first quarter is going to be exceptionally strong versus the first quarter last year," said Gene Gillespie, an oil analyst at Howard, Weil, Labouisse.

"It should also make pretty good reading relative to the fourth quarter."

Houston-based ConocoPhillips -- formed by the $15.4 billion combination of Conoco and Phillips last year -- reported a net loss of $410 million, or 60 cents a share, reversing a year-ago profit reported by Phillips as a stand-alone company.

The results include $1.2 billion in charges to account primarily for the planned sale of a substantial portion of its 3,700 company-owned service stations.

The company, which still ranks behind Exxon Mobil Corp. XOM.N and ChevronTexaco Corp. CVX.N in terms of stock market value and revenue, is in the midst of selling assets in its upstream and downstream, or refining and marketing, businesses as part of a plan to shed properties that do not bring in adequate returns.

ConocoPhillips also forecast an impact of about $30 million to $50 million a month as long as the shutdown in Venezuela continues, less than many analysts expected.

"People had been fearful the impact would be greater," said Jacques Rousseau, an analyst at Friedman, Billings, Ramsey, who rates the company an "outperform" and does not own its shares.

He added: "The key thing is they provided some flavor on what's going on in Venezuela, with an estimate of what the strike is costing them."

KERR-MCGEE HURT BY CHARGES

Los Angeles-based Occidental Petroleum said fourth-quarter results swung to a profit of $322 million, or 84 cents a diluted share, from a year-earlier net loss of $247 million, or 65 cents a share. Year-ago results included a $240 million charge for the sale of its interest in the Equistar Chemicals joint venture.

Independent oil and gas explorer Unocal also a reported a fourth-quarter profit -- posting net income of $96 million or 38 cents a share. That reversed a year-ago net loss of $29 million or 12 cents a share.

It also forecast better-than-expected 2003 earnings per share of $2.45 to $2.75 and first-quarter earnings per share of 60 cents to 70 cents, which is in line with expectations. The company expects production for this year at the lower end of a range of 480,000 to 495,000 barrels of oil and gas a day.

Kerr-McGee Corp. KMG.N reported a wider net loss after taking hefty charges for a poorer-than-expected performance at a North Sea oil field and other asset write-downs.

asia.cnn.com Thursday, January 30, 2003 Posted: 2:26 AM HKT (1826 GMT)

The Venezuelan strike has caused long lines for gas stations and banks.

CARACAS, Venezuela (Reuters) -- Venezuelan private banks decided on Wednesday to restore normal working hours, opening another crack in a faltering 8-week-old opposition strike against leftist President Hugo Chavez.

But striking oil workers at the heart of the opposition campaign stayed firm in their shutdown, which has battered Venezuela's fragile economy and rattled energy markets by slashing oil output in the world's No. 5 petroleum exporter.

Private banks, which make up nearly 90 percent of the Venezuelan financial sector, had been operating for limited daily hours and restricting transactions since December in support of the strike to pressure leftist Chavez from office.

"The National Banking Council and the Venezuelan Banking Association decided at a meeting by a two-thirds vote to restart normal operating hours from Monday," association president Ignacio Salvatierra told reporters. The two associations represent most financial institutions.

Chavez, a populist former paratrooper whose fiery rhetoric is peppered with class warfare slogans, had threatened to seize striking banks, schools and factories to break the strike.

As the strike nears the two-month mark, backing for the protest in non-oil sectors has begun to fray as private businesses and stores reopen to fend off bankruptcy. Traffic in Caracas, famous for its brutal gridlock, has begun to choke the streets of the capital again.

Banks don't belong to their presidents but to their deposit holders.

Opposition leaders, who brand former paratrooper Chavez's rule as dictatorial, inept and corrupt, offered on Tuesday to ease their strike by exempting food production and education. But they have vowed to keep up the shutdown until Chavez accepts elections. The president's term ends in 2007.

The shutdown stoked tensions as it forced Venezuelans to line up for cash, dwindling supplies of gasoline and some basic foodstuffs. At least seven people have been killed in rival street protests and shootings since the strike began.

Bankers cited pressure from the public and account holders for lifting the stoppage.

"This is the result of demands from the public and deposit holders ... banks don't belong to their presidents but to their deposit holders," said Nelson Mezerhane, president of the Federal banking group.

Looming economic woes

With the strike cutting off oil exports that account for half of the government's revenues, the government plans to slash its budget and suspended foreign currency trading while it prepares a fixed exchange rate to protect its reserves.

Graffiti covers a McDonald's in Caracas.

Battered by economic uncertainty, the local bolivar currency has plummeted more than 28 percent since the strike began. Venezuela's international reserves fell 7.3 percent to $11.05 billion as the Central Bank burnt through as much as $60 million a day to shore up the currency.

Economists say exchange rate controls will help the government stem capital flight in the short term. But restrictions could later squeeze the private sector and force the government to defend its fixed rate from black market exchange rates.

Chavez, who was elected in 1998 and survived a coup last year, has dismissed opposition calls for him to resign. Though his popularity has fallen sharply this year, he maintains a solid base of support among poorer voters who believe his left-wing reforms are the key to a better life.

The Venezuelan leader, who led a botched coup himself six years before his ballot box victory, has fought back against the strikers by deploying troops and replacement crews to oil installations. But oil production still remains only at around a third of the usual 3.1 million barrels per day.

The international community will intensify its efforts to break Venezuela's political deadlock this week when representatives from six nations arrive in Caracas to lend their weight to peace talks. The negotiations chaired by the Organization of American States have so far failed to break their impasse.

Representatives from the six nations, led by the United States and Brazil, are scheduled to arrive on Thursday in Caracas for talks that start Friday.

news.bbc.co.uk Wednesday, 29 January, 2003, 21:06 GMT

Venezuelan banks are to end their nationwide strike on 3 February, following reports that president Hugo Chavez would punish those that didn't resume normal hours.

The banking sector said it would return to working a full seven hours a day instead of the three hours per day they have been working since the strikes began.

This is the result of demands from the public and deposit holders

Nelson Mezerhane, Federal banking group president

The eight-week old protests, which began on 2 December, were aimed at forcing Mr Chavez from office.

But the president had threatened to seize schools, banks and factories to break the strike.

Dwindling enthusiasm

The National Banking Council and the Venezuelan Banking Association said they have decided by a two-thirds vote to restart normal operating hours from Monday.

"This is the result of demands from the public and deposit holders," said Nelson Mezerhane, president of the Federal banking group.

"Banks don't belong to their presidents but to their deposit holders."

Support for the near-two month strikes had been starting to wane in the non-oil sectors, as businesses were forced to reopen to avoid bankruptcy.

The strikes have forced Venezuelans to queue for cash, food and gas, and sparked angry protests in which at least seven people have been killed.

Management at shopping centres, restaurants and schools were also reportedly planning to return to work on Monday.

Oil strike continues?

But oil workers at the heart of the opposition campaign vowed to continue.

More than 5,000 Venezuelan oil workers have been fired since they began their strike.

And oil production has almost ceased in Venezuela - the world's fifth largest oil exporting country - helping to send crude oil prices two-year highs.

The strikes have so far cost Venezuela more than $4bn (£2.4bn) and some analysts are predicting the economy will shrink by 25% in 2003, after contracting by 8% in 2002.

Opposition leaders are trying to change the constitution to shorten Mr Chavez's term in office from seven years to four.