Marathon profits decline 49% on lower margins in downstream; higher prices balance decline in upstream
Allen Baker, PNA contributing writer
Marathon Oil Corp. reported third-quarter profits of $87 million, barely half of the $170 million for the same quarter a year ago. The Houston-based company had earnings of $168 million for the second quarter.
Special items caused major adjustments in both the 2002 and 2001 quarter, cutting the net by nearly half in each case. With the adjustments, Marathon’s profits were $149 million for the 2002 quarter, $319 million for the 2001 period.
Upstream income held up, with Marathon recording $250 million from that segment, compared with $256 million a year earlier even though volumes were lower.
Marathon’s third-quarter production was 384,000 barrels of oil equivalent, down 6 percent from 409,100 barrels a year ago. The drop from the second quarter, when the company produced 424,200 barrels daily, was even sharper.
But liquids prices were 7 percent higher than in the year-ago quarter, $24.64 a barrel versus $23.03 including derivative gains and losses. Gas prices averaged $2.44 per thousand cubic feet, down 9 percent from $2.68 a year earlier.
The big earnings slide was on the downstream side, where third-quarter income was just $108 million, less than a fifth of the $579 million from that segment a year earlier.
Total crude volume refined dropped only 3 percent to 931,300 barrels daily for the Marathon Ashland Petroleum, the company’s joint venture with Ashland Oil. But the refining and wholesale marketing margin plummeted to 3.89 cents a gallon from 13.14 cents.
Revenues were up 2 percent in the quarter to $8.52 billion from $8.35 billion a year ago. That’s also up from revenues of $8.13 billion in the second quarter of this year.
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