EXXON <XON> NET DROPS ON LOWER OIL, GAS PRICES
Exxon Corp reported a 37 pct drop in
first quarter profits to 1.07 billion dlrs citing lower oil and
gas prices.
    The company said profits in the lastest quarter included a
26 mln drl restructuring gain from divestment of certain gold
operations overseas, while last year's first quarter profit of
1.71 billion dlrs included the initial charge of 235 mln dlrs
for its 1986 corporate reorganization.
    First quarter revenues were down 13 pct to 19.44 billion
dlrs.
   
    One time items aside, Exxon said, its first quarter results
were stronger than 1986's final quarter which included several
large asset sales and positive inventory adjustments.
    It said earnings per share declined 36 pct reflecting the
company's continued purchases of its own common for the
treasury. During the first quarter, 5,085,000 shares were
acquired at a cost of 416 mln dlrs compared with 3,132,000 in
1986's fourth quarter.
    Commenting on the first quarter, Exxon said crude oil
prices strengthened moderately within the quarter and were
higher than a year ago at the end of the quarter.
   
    However, average crude prices for the quarter were below
the year ago period, leading to lower earnings for exploration
and production operations, Exxon said.
    Also contributing to reduced earnings were lower natural
gas prices, primarily overseas, representing contract
adjustments representing contract adjustments tied to falling
product prices in 1986, the company said.
    During the first quarter, the company said, intense
competition in both domestic and international markets served
to depress margins for refined products.
   
    Exxon said the lower product margins resulted in
significantly reduced earnings for refining and marketing
operations, contrasting sharply with the unusually strong
margins prevailing in the first qtr of 1986.
    It said savings from efforts to control costs and improve
efficiency helped soften the negative impact of lower oil and
natural gas prices.
    Exxon said earnings from chemicals and power generation
activities showed consideratble improvement, remaining strong
throughout the period.
 Reuter
