Friday's East Bay Biz Buzz
www.bayarea.com Posted on Fri, Jan. 31, 2003
ChevronTexaco Corp. (CVX), the second-largest U.S. oil company, www.chevrontexaco.com, had fourth-quarter profit of $904 million as energy prices rose. Chief Executive David O'Reilly called the results "unsatisfactory" after a refining loss, merger costs and a failed partnership eroded earnings.
Net income was 85 cents a share, the company said in a statement. That compared with a fourth-quarter 2001 loss of $2.52 billion, or $2.38 a share, on asset writedowns and costs from Chevron Corp.'s acquisition 15 months ago of Texaco Inc. Revenue rose 26 percent to $27.1 billion.
ChevronTexaco recorded $160 million in merger expenses and costs tied to its stake in Dynegy Inc., which today restated four years of earnings and reported a loss. ChevronTexaco's $151 million loss in the refining business eroded profit from oil and natural-gas production, which more than doubled. Earnings fell short of analyst expectations.
"It wasn't a very good report at all," said James Halloran, who oversees $24 billion, including nearly 1.3 million ChevronTexaco shares, at National City Wealth Management. "Refining wasn't competitive. Production was down. When do they turn this thing around?"
Profit after one-time costs and gains, including $52 million in expenses related to ChevronTexaco's 27 percent stake in Dynegy, was $1 a share, up from 47 cents a year earlier. Analysts expected per-share profit of $1.28, according to the average estimate in a Thomson First Call poll.
Shares of San Ramon-based ChevronTexaco fell $1, or 1.6 percent, to $63.20 at 1:03 p.m. in New York Stock Exchange composite trading and slid as much as 3.3 percent. The stock has fallen 25 percent in the past year.
Operating profit from exploration and production jumped to $1.23 billion from $544 million a year earlier, the statement said. Cold weather across much of the nation stoked demand for heating fuel and concerns over supply disruptions pushed prices higher.
A national strike in Venezuela choked off shipments from the No. 5 oil-producing country, and the possibility of a U.S.-led attack on Iraq threatened to disrupt supplies from the Middle East, which produces about one-fourth of the world's oil.
Price gains helped make up for a 6 percent decline in fourth-quarter production, to the equivalent of 2.57 million barrels of oil a day.
Equity movers
Concord-based biotechnology firm Cerus Corp. (CERS), www.ceruscorp.com, fell $5.76, or 40 percent, to $8.56 and traded as low as $8.47. Cerus said it will delay the introduction of some of its blood-purifying systems. The company was downgraded by analysts at companies including J.P. Morgan and Merrill Lynch.
Hayward's Impax Laboratories Inc. (IPXL), www.impaxlabs.com, rose 74 cents, or 19 percent, to $4.73 and traded as high as $5.05. The drugmaker received Food and Drug Administration final approval for its generic version of Claritin-D, which it will make for over-the-counter use.
In December, the FDA approved the switch in the drug's status from a prescription drug to an over-the-counter drug.
Under the non-exclusive licensing, contract manufacturing and supply agreement with Schering-Plough and a semi-exclusive development, license and supply germinate with Wyeth's consumer healthcare division, Impax said it will supply both companies for the over-the-counter market.
Wyeth in December said U.S. regulators had approved its rival over-the-counter version of Claritin.
Shipment of the product is expected to commence shortly, Impax said.
Compiled by Ellen Lee from company and wire reports. A new column is posted weekdays at the Business site on www.contracostatimes.com at 12:30 p.m. Got East Bay business news? Reach Lee at 925-952-2614 or at elee@cctimes.com.