"Our financial performance for the quarter reflects the depressed economic conditions and business environment impacting not only our industry, but domestic and global markets as well," said Jim Mulva, chairman and CEO for the Houston-based company.
For 2008, the company recorded a net loss of $16.998 billion, [image-nocss] or $11.16 per share, compared with 2007 net income of $11.891 billion, or $7.22 per share. Revenues were $240.8 billion, versus $187.4 billion a year ago.
The exploration and production (E&P) segment reported a fourth-quarter net loss of $24.293 billion, compared with net income of $3.928 billion in the previous quarter and $2.608 billion in fourth-quarter 2007. Fourth-quarter 2008 E&P adjusted earnings were $1.392 billion, compared with adjusted earnings of $3.818 billion in the previous quarter and $2.385 billion in fourth-quarter 2007. The E&P segment had a net loss for 2008 of $13.479 billion, compared with net income of $4.615 billion in 2007.
The refining and marketing (R&M segment) reported fourth-quarter net income of $289 million, compared with $849 million in the previous quarter and $1.122 billion in fourth-quarter 2007. Fourth-quarter 2008 R&M adjusted earnings were $753 million, compared with adjusted earnings of $847 million in the previous quarter and $1.097 billion in fourth-quarter 2007. R&M net income for 2008 was $2.322 billion, compared with $5.923 billion in 2007.
Separately, San Antonio-Texas-based Valero Energy Corp. has reported fourth-quarter 2008 net income of $732 million, or $1.41 per share, excluding a noncash loss from the impairment of goodwill of $4.1 billion, or $4 billion after taxes. This compares to fourth-quarter 2007 net income of $567 million, or $1.02 per share. Including the goodwill impairment loss, the company reported a fourth-quarter 2008 net loss of $3.3 billion, or $6.36 per share. The goodwill impairment loss represents a writeoff of the entire balance of the company's goodwill from the application of impairment testing criteria under existing accounting rules.
The company reported a fourth-quarter 2008 operating loss of $2.9 billion. Excluding the goodwill impairment loss, fourth-quarter 2008 operating income was $1.2 billion compared to $884 million for fourth-quarter of 2007. The increase in operating income was primarily due to higher margins for distillate products such as diesel and jet fuels, increased margins for secondary products such as asphalt and petroleum coke and strong retail margins. Also contributing to the increase in operating income was the favorable effect from a year-end LIFO increment of $327 million or $214 million after taxes. Partially offsetting the increase in operating income were lower gasoline margins and lower overall refinery throughput volumes.
For the year ended Dec. 31, 2008, the company reported a net loss of $1.1 billion, or $2.16 per share. Excluding the goodwill impairment loss, full year 2008 net income was $2.9 billion, or $5.42 per share, which compares to full year 2007 income from continuing operations of $4.6 billion, or $7.72 per share.
"Despite very low gasoline margins in the fourth quarter, we reported solid operating results that showed the competitiveness of our operations," said Bill Klesse, Valero's chairman and CEO. "Our complex refineries benefited from favorable discounts on feedstocks, and our retail network had a record quarter when its margins improved as crude oil prices declined. Regarding the goodwill writedown, investors should understand that this noncash charge does not affect the cash flow generation from our assets or Valero's competitive position within the refining industry."
Click here for a transcript of the Valero earnings call.
Meanwhile, Hess Corp., New York, reported a net loss of $74 million for fourth-quarter 2008 compared with net income of $510 million for fourth-quarter 2007.
E&P generated a loss of $125 million in fourth-quarter 2008 compared with income of $583 million in the fourth-quarter 2007.
Marketing and refining earnings were $152 million in fourth-quarter 2008 compared with $31 million in fourth-quarter 2007. Refining earnings were $27 million in fourth-quarter 2008 as they were in the same quarter a year earlier as improved margins offset lower volumes. Marketing earnings were $138 million in fourth-quarter 2008, up from $19 million in fourth-quarter 2007, reflecting higher margins.
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