Unocal Profit Falls on Charges

El Segundo-based Unocal Corp., which explores for oil and natural gas around the world, reported slightly lower third-quarter income because of a decline in North American production and charges for environmental cleanup and litigation.

Net income slipped 2.9% to $99 million, or 41 cents a share, from $102 million, or 42 cents a share. Net income for the latest quarter included $22 million in charges from environment cleanup and litigation and $5 million related to hedging activities. The year-ago quarter included a similar level of charges.

Unocal posted operating earnings, excluding special items, of $126 million, or 52 cents a share, compared with $127 million, or 52 cents a share, in the year-ago quarter. Adjusted after-tax operating earnings fell just short of the 54-cent average of analyst predictions by Thomson First Call.

Third-quarter revenue dropped nearly 19% to $1.29 billion from $1.58 billion. After the report was released, Unocal’s stock dipped 83 cents to close at $28.92 on the New York Stock Exchange.

Unocal said it benefited from higher oil prices and increased production at international oil and gas properties. But earnings were hurt by depressed natural gas prices during the quarter and a drop in North American production of natural gas and natural gas liquids to an average of 237,000 barrels of oil equivalent per day, from 288,000 barrels in the third quarter of last year.

Production fell primarily because of a continuing depletion of natural gas fields in the Gulf of Mexico and temporary shutdowns from gulf storms, Unocal President Timothy H. Ling said.