Chevron earnings hit record

Chevron Corp. on Friday reported the highest quarterly and annual profits in its 126-year history, refocusing attention on the high fuel prices that have enriched the oil company’s shareholders and exasperated consumers paying more to fill their gasoline tanks and heat their homes.

The San Ramon, Calif.-based company’s fourth-quarter earnings rose 20 percent to $4.14 billion, the most it has made in any three-month period since its inception in 1879. The performance topped the $4.13 billion earned during the second quarter of 2004 — the early stages of a two-year boom.

Chevron’s profit of $14.1 billion for the full year also was a company record. It now has posted record annual profits in each of the last two years, earning a combined $27.4 billion.

Oppenheimer & Co. Fadel Gheit believes Chevron will set yet another new earnings record this year as the company continues to mine crude oil prices that are expected to remain above $60 per barrel. “We are only scratching the surface,” Gheit said. “In my view, this company is hitting on all cylinders.”

The windfalls that Chevron has been generating aren’t unique in its industry. Exxon Mobil Corp., the world’s largest publicly traded oil company, earned nearly $10 billion in the third quarter and its profit for the entire year is expected to surpass $35 billion when it releases its fourth quarter results Monday.

While the oil industry’s recent prosperity has pleased Wall Street, it has raised hackles in Congress, where some lawmakers have recently threatened a windfall profit tax to prod companies to spend more money to increase production.

Sen. Barbara Boxer, a California Democrat who attacked Chevron Chairman David O’Reilly and other oil industry executives when they appeared before Congress in November, lashed out again Friday.

“I call on the Bush Administration and the Federal Trade Commission to put an end to this price gouging,” Boxer said. “You’d think FTC stood for ‘Friend to Chevron’ with the way they sit back and let these companies gouge consumers.”

Chevron and its rivals maintain that any punitive measures taken against the industry ultimately will do more harm than good, exacerbating the recent market conditions that have driven up energy costs.

•Guidant Corp., the medical device company that agreed this week to be acquired by Boston Scientific Corp., said Friday its fourth-quarter profit fell 25 percent as a result of highly publicized product recalls that began over the summer.

Net income fell to $78.9 million, or 23 cents per share, for the three months ended Dec. 31 from $104.5 million, or 32 cents per share, a year ago, as sales declined and product recalls and merger expenses continued as Johnson & Johnson sought and failed to get a better deal for the company. Indianapolis-based Guidant reported earnings per share from continuing operations of 25 cents for the latest quarter.

Revenue fell 15 percent to $828.2 million from $968.2 million a year ago, as worldwide sales of implantable heart defibrillators fell 19 percent to $372 million, and worldwide pacemaker sales fell 24 percent to $134 million. Steeper declines were reported in the U.S.

Since June, Guidant has recalled or issued safety advisories for about 88,000 defibrillators and more than 200,000 pacemakers. At least seven deaths have been linked to the faulty devices.

The company faces state and federal regulatory investigations as well as product liability lawsuits. Next month, a Texas jury is expected to begin hearing testimony in the first product liability trial related to the recalls.

•Poised to leave bankruptcy despite continuing losses, United Airlines reported a fourth-quarter operating loss of $182 million Friday that showed significant improvement after a three-year restructuring but still ran its money-losing streak to 5 1/2 years.

The nation’s No. 2 airline and its parent UAL Corp. plan to emerge from Chapter 11 on Wednesday.

The net loss was a record $16.9 billion for the fourth quarter and $21.2 billion for the year, virtually all non-cash reorganization expenses. Most of those on-paper losses will be reversed within weeks, however, reflecting unsecured claims that will be settled for a fraction of the charges upon exit from bankruptcy.

The company is expected to disclose a multibillion-dollar gain when it reports first-quarter results, formally accounting for the overturning of many of those losses.