Company reports several items impacting 4th Quarter earnings
Posted: 12 January 2005
Occidental Petroleum Corporation recently announced a number of fourth quarter 2004 charges and a tax credit that will impact the comparability of its fourth quarter earnings to prior quarters. These items will reduce net after-tax earnings by approximately $65 million, or $0.16 per share.
For strategic and economic reasons the company's chemicals affiliate, Occidental Chemical Corporation (OxyChem) will exit the unprofitable vinyl specialty resins business by closing the company's Pottstown , Pennsylvania manufacturing facility effective immediately and take a pre-tax charge of $53 million. Approximately 220 employees will be affected by the closure. In addition to the charge for closing the Pottstown plant, Occidental also will take a pre-tax charge of $12 million to write-off certain production facilities using mercury cell technology at OxyChem's Delaware City , Delaware chloralkali plant. These actions were taken to strengthen the company's profitable core chloralkali and polyvinyl chloride (PVC) business.
Occidental also will take pre-tax charges totaling approximately $76 million to increase its environmental remediation reserves, provide for several ongoing litigation matters and increase its self-insurance reserves. The environmental charge included in the total mainly reflects revisions of cost estimates and changes in work programs at a number of existing remediation sites. These charges will be partially offset by a tax credit of approximately $27 million that will be recorded to reflect the settlement of certain income tax audit issues.
Posted by Editor Pipeline Magazine
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