Texaco, Inc. yesterday reported a 211 percent increase in its third-quarter profits over the third quarter of last year, the largest in the list of such increases reported by major oil companies this week.
Combined profits of 18 major U. S. oil firms in the third quarter were 87 percent above the figures for 1978, according to a compilation by The Washington Post [Chart, Page D8.]
Partly in response to the profit figures, the Carter administration yesterday ordered 20 oil companies to supply information on their recent profits within 10 days, to determine compliance with the voluntary wage and price controls.
"Because of the alarming impact of rising petroleum product prices on the national economy, the public is owed an explanation," said Robert Russell, director of the White House's Council on Wage and Price Stability.
Hefity profit increases during the July-September period, reported in the last two weeks by most of the oil firms, "suggest the possibility of non-compliance" with profit margin standards, Russell stated.
But Texaco Chairman Maurice Granville, defending his company's recent gains, said two-thirds of his firm's profit gains in recent months came from overseas, where soaring energy prices are not controlled as they partly are here. He described 1978 as a year of "abnormally low earnings" and said profits of the current magnitude are required to finance $10 billion of planned exploration and capital spending by Texaco over the next five years.
At the same time, Texaco revealed a substantial reduction in its estimates of proved crude oil and natural gas reserves in this country. An overall downward revision of 24 percent was attributed to "incongruities" between production levels and supposed reserves in certain oil fields -- mainly in southern Louisiana.
Separately, there were these other developments yesterday:
The Civil Aeronautics Board approved, starting Nov. 1, a 3.7 percent increase in domestic fares by U. S. airlines, to offset higher jet fuel prices. However, the CAB warned the air carriers not to act hastily.
The Council on Wage and Price Stability announced opposition to a request from Union Oil Co. for an exception to Department of Energy price ceilings. Union buys large quantities of crude oil at premium prices on the open market and had asked to be compensated for extra costs. But the inflation-monitoring agency argued that such an exception would be inflationary by spreading higher crude oil costs to other refiners.
Mobil Corp., the nation's second largest oil firm, raised its dividends on common stock by 15 cents to 75 cents a share. Earlier this week, Standard Oil Co. of Ohio also raised its dividends. Both companies reported substantial increases in profits.
The Department of Energy made public a summary of studies by the accounting firm of Alexander Grant & Co., which concluded that information on crude oil and petroleum product inventories supplied by the industry provided "reasonably accurate" data to the government, with no evidence of deceit or withholding of information.
Overall third-quarter profits of 18 oil companies totaled $5.69 billion, compared with $3.04 billion in the compliation yesterday by The Washington Post.
Texaco, the third-largest of the American companies, said its third quarter profits were $612 million, or $2.25 a share of common stock, compared with $197 million (72 cents a share) in the same period of 1978. However, the 1979 quarter included a one-time gain of $103 million from a required tax benefit on foreign operating losses and tax credits from previous years. Sales rose to $10.25 billion from $7.04 billion.
Nine-month earnings at Texaco were $1.15 billion compared with $524 million in the first nine months of 1978. On an annual basis, Texaco's rate of return on total assets of $21 billion was 8.2 percent in 1979, compared with an average for all U. S. manufacturing of 8.6 percent.
Two smaller petroleum firms also reported sharp profit gains. Amerada Hess earnings for the third quarter increased 209 percent to $119 million ($2.84 a share) from $30.5 million (74 cents) a year earlier. Crown Central Petroleum's profits rose 230 percent to $23 million ($5.67 a share) from $7 million ($1.72). "What can I say? We've had a good year," said Ann Stifler, a spokeswoman for Baltimore based Crown.
White House inflation adviser Alfred E. Kahn said yesterday that part of the increase in petroleum prices is the result of supply and demand characteristics of the market. If that proves to be the case, he added in congressional testimony, the government should not interfere but should "tax the hell out of the industry." CAPTION: Graph, OIL COMPANY EARNINGS -- Third-quarter profits of 18 large American petroleum firms, listed in the chart above, totaled $5.69 billion compared with $3.04 billion in the same period a year ago. The profits were at record levels. 87 percent ahead of the 1978 period. According to the Labor Department, U. S. gasoline prices rose 46 percentsince the start of 1979 to an average of 99.8 cents last month. Much of the price increases and higher oil profits reflect a 60 percent increase in prices since Jan. 1 by oil-producing nations. rThe companies said most profit increases came from overseas business. By Robin Jaraeux and Bill Perkins -- The Washington Post