Santa Fe-SP Profit Dives in Quarter

Santa Fe-Southern Pacific Corp. reported that its net income for the third quarter plummeted due to a large writedown on its petroleum operations.

Net income for the period ended Sept. 30 was $12.4 million, compared to $151.4 million a year ago. Revenue fell to $1.4 billion from $1.7 billion.

The Chicago-based railroad and natural resources company recorded a writedown of $130.6 million for the quarter, which it said was related to the effect of lower oil and gas prices on Santa Fe Energy Partners. Santa Fe Southern Pacific Corp. has a 78% interest in the oil and gas exploration concern.

Overall petroleum production and marketing activities, which are conducted through Santa Fe Energy Co., had an operating loss of $138.3 million for the quarter after generating income of $32.3 million during the same period last year. The company said oil production was 10% below last year and natural gas production fell 36%.

Operating income for Santa Fe’s transportation group increased to $88.5 million for the quarter from $83.4 million last year. Third-quarter real estate operating income, $61.1 million, was about half of the amount reported last year, the company said.

Forest products operating income was $16 million, up from $10 million in the same quarter last year. The increase, the company said, results from generally higher prices and production at both Kirby Forest Industries and Santa Fe Pacific Timber.