During the oil crises of the 1970s, about the only thing bigger than oil company profits was the outcry they provoked.

But this time, things are different. Gasoline prices may be soaring, but oil company profits are not.

Although crude oil prices have more than doubled, to more than $40 a barrel from less than $20 since Iraq invaded Kuwait Aug. 2, shrewd management, good timing and changes in the oil industry are expected to limit the size of the third-quarter profits that major oil companies are to announce next week.

Earnings at the largest major oil companies are expected to be up only slightly or flat, and some, including Fairfax-based Mobil Corp., are expected to report declines in income. Amoco Corp., the nation's fifth-largest oil company, reported a 13 percent drop in third-quarter operating earnings Thursday.

One key reason for the modest results, oil industry analysts say, is that the politically astute oil companies have responded to President Bush's call for restraint by not raising the prices of gasoline and other products as quickly as crude oil costs have gone up in recent weeks. That has caused many companies' "downstream" refining and marketing divisions to operate at a loss for much of the quarter.

That, in turn, has offset big gains in most of the companies' crude oil production operations. But even those "upstream" profits have been limited, since most of the hefty crude price increases came late in the quarter that ended Sept. 30. In addition, most big oil companies control less crude oil than they did just a few years ago, forcing them to buy crude from others for their refineries.

Overall, said Eugene Nowak, an oil industry analyst at Dean Witter Reynolds Inc. in New York, oil companies' third-quarter earnings will be "surprisingly poor in terms of what the public perception has been. ...

"There won't be big numbers," he said. "I think the major oil companies, both domestic and international ... will essentially have flat-to-down earnings."

This year's results will be in sharp contrast to oil company profits in the previous oil crises, in 1973-74 and 1978-79. In those periods, the profits of major oil companies doubled and tripled as oil prices skyrocketed. The huge profits set off public and political firestorms that led to stiff oil price controls after the first crisis and a "windfall profits" tax after the second.

Most of those profit increases came from rapid rises in the value of the companies' crude oil reserves as oil prices soared, and the companies' ability to pass increases through to the consumer quickly -- aided, ironically, by price controls that encouraged them to recover higher costs.

But times have changed. Oil has been deregulated, the windfall profits tax repealed. And declines in companies' crude oil reserves in the United States and abroad have greatly reduced the amount of oil that the major oil companies control. Paul Mlotok, who follows the industry for Morgan Stanley & Co. in New York, estimates that major oil companies now buy more than half their crude supplies on the open market from independent producers and foreign countries.

That's not to say companies haven't done well pumping crude the past 2 1/2 months, as prices have doubled. Most of that increase is profit.

Analysts said the companies whose main business is producing crude oil likely will report large third-quarter increases. Oryx Energy Co., a producer that was spun off from Sun Co. Inc. when that major oil company got out of the production business amid falling prices, already has reported a more than seven-fold increase in third-quarter profit.

For oil companies that refine and sell gasoline and other products in addition to producing oil, however, the profits on crude will be all but wiped out by losses on the marketing side.

Analysts say oil companies heeded President Bush's call for gasoline pricing restraint to avoid the kind of political heat they took in previous crises. "Companies have been through two of these, and they don't want to exacerbate pressures for a windfall profits tax," said William Randol, an analyst at First Boston Corp. in New York.

Companies only raised gasoline prices about half as much as crude costs went up. "Overall in marketing, in terms of profitability, we're still under water," said Stephen D. Pryor, general manager of planning and financial analysis for Mobil's U.S. refining and marketing division.

Among the biggest oil companies, Exxon Corp.'s third-quarter earnings generally are expected to be flat compared with last year, Texaco Inc. and Atlantic Richfield Co. are expected to have slightly better results and Mobil's and Chevron Corp.'s profits are expected to drop.

Perhaps the hardest-hit companies in the industry will be those whose chief business is selling petroleum products and who don't have production profits to offset marketing losses.

Yesterday, one of these companies, Baltimore-based Crown Central Petroleum Corp., said its earnings slumped 73 percent in the third quarter, to $2.4 million (24 cents a share) from $8.8 million (88 cents) a year earlier. Revenue rose 57 percent, to $501 million from $319 million. In the first nine months of its fiscal year, Crown Central earned $18.7 million ($1.90), up 5 percent from $17.9 million ($1.78). Nine-month revenue rose 60 percent, to $1.5 billion from $907 million last year.



..........Bernard....Paul.......Eugene.....3rd Qtr




Exxon.....80 cents...90 cents...80 cents......85 cents

Mobil.....80 cents...80 cents...75-80 cents...93 cents




SOURCES: Company and analyst reports