EL SEGUNDO, Calif. – Unocal Corp. (UCL), the oil and gas company that is the target of a takeover battle between Chinese oil company CNOOC Ltd. (CEO) and Chevron Corp. (CVX), on Friday said its second-quarter profit rose 39 percent, driven by high energy prices and lower interest expense.
Unocal earned $475 million, or $1.73 per share, for the three months ended June 30 compared with $341 million, or $1.25 per share, in the prior-year period.
Adjusted for special items and the effect of accounting changes, the company reported earnings of $488 million, or $1.77 per share, compared with $231 million, or 86 cents per share, a year ago.
Wall Street's consensus view for the quarter was $1.63 per share, the average of 15 analysts surveyed by Thomson Financial.
Revenue rose to $2.21 billion from $1.86 billion a year ago.
Unocal's earnings release did not mention the bid from CNOOC, but said it will hold a special shareholder meeting on Aug. 10 to discuss its recently amended merger agreement with Chevron.
On Friday, local media in Hong Kong reported that CNOOC may withdraw its bid for Unocal, but the Financial Times reported the Chinese oil company will decide this weekend whether to launch a sweetened offer of about $20 billion.
CNOOC, which is 70 percent owned by the Chinese government, had offered $67 per share for Unocal last month after Unocal had already agreed to be acquired by Chevron.
CNOOC's bid of $18.5 billion was considerably higher than Chevron's original offer of roughly $60 per share in a combination of cash and stock based on Tuesday's closing price on Chevron stock. That bid was valued at around $16.6 billion.
The difference in the CNOOC and Chevron bids had grown as investors drove the price of Unocal shares above Chevron's offer price.
After CNOOC made its bid for Unocal, members of Congress demanded a review of the offer by the Committee on Foreign Investment in the United States.
Under the agreement between Unocal and Chevron reached last April, Chevron has the right to force a vote of Unocal shareholders. That vote is scheduled for the Aug. 10 meeting.
Chevron's revised offer is structured as 40 percent cash and 60 percent stock. Unocal stockholders may elect to receive for each share of Unocal stock either $69 in cash, 1.03 shares of Chevron stock or a combination of $27.60 in cash and 0.618 of a share of Chevron common stock. Chevron will issue approximately 168 million shares of Chevron stock and pay approximately $7.5 billion in cash, according to the joint statement issued by the companies.
Since CNOOC made its all-cash bid, Chevron has emphasized that its offer was superior because it had already cleared regulatory reviews. The CNOOC bid, by contrast, could take six months or more to be reviewed by U.S. and overseas agencies.
CNOOC first expressed its interest in acquiring Unocal last December, before Chevron approached.