NEWTOWN SQUARE, Pa., Jan. 21 /PRNewswire/ -- ARCO Chemical Company
(NYSE: RCM) today reported results for the quarter and year ending
December 31, 1996. Full year net income for 1996 was $348 million, or $3.60
per share, compared with $508 million, or $5.28 per share, for 1995.  Revenue
for 1996 was $3,955 million compared with $4,282 million a year ago.
    Fourth quarter net income was $64 million, or $0.66 per share, compared
with net income of $115 million, or $1.19 per share, for the fourth quarter of
1995.  Net income for the third quarter of 1996 was $97 million, or $1.00 per
share.  Revenue for the fourth quarter of 1996 was $979 million, compared with
$993 million for the same quarter a year ago, and $1,035 million in the third
quarter of this year.
    Commenting on the results, Alan R. Hirsig, president and chief executive
officer, said, "Lower styrene prices have been the major factor in the fall
off in 1996 earnings compared to 1995.  However, it is important to note that
the increased contribution of our core propylene oxide (PO) business allowed
the company to achieve improved profitability in 1996, compared to the last
down cycle for styrene in the early 1990's."
    The primary reason for the decline in net earnings from the third quarter
1996 was lower co-product profitability resulting from higher feedstock costs
coupled with weaker MTBE and styrene markets.  The company anticipates that
raw material cost pressures will continue to squeeze product margins during
the first quarter of 1997.
    Mr. Hirsig further commented, "In 1996, management took aggressive
strategic actions to position ARCO Chemical Company for long-term growth and
profitability. The company has undertaken a series of major investments and
transactions designed to focus resources on our core PO and urethanes and
performance chemicals businesses.  These are products and markets where ARCO
Chemical is a worldwide leader."
    In April 1996, ARCO Chemical Company announced plans to build the world's
largest grass roots propylene oxide/ styrene monomer plant in Rotterdam.
During the fourth quarter of 1996, the company began expansion of its existing
PO/SM capacity in Channelview, Texas.  In September 1996, ARCO Chemical
Company sold its plastics business to NOVA Chemicals.  The company purchased
Olin Corporation's isocyanates business in December 1996.
    In addition to the Olin acquisition for $562 million, which included
$85 million of working capital, other capital expenditures were $244 million
in 1996 and $195 million in 1995.  The company expects 1997 capital spending
of about $450 million.
    ARCO Chemical Company is a leading worldwide manufacturer and marketer
of propylene oxide and derivatives and other intermediate chemicals.  Its
products are used in a wide range of consumer and industrial goods, including
automotive components, cushioning, paints and coatings, plastics, home
furnishings, engine coolants and reformulated gasoline.

                            ARCO CHEMICAL COMPANY
                           Selected Financial Data
                 (Millions of Dollars except per share data)

                                             Three Months      Twelve Months
                                          Ended December 31  Ended December 31
                                                      (Unaudited)
                                              1996   1995     1996     1995
    Total revenues                            $979   $993   $3,955   $4,282
    Costs and other operating expenses         794    707    3,067    3,102
      Gross profit                             185    286      888    1,180
    Selling, general and
      administrative expenses                   67     75      267      278
    Research and development                    20     21       81       79
      Operating income                          98    190      540      823
    Interest expense                          ( 21)  ( 22)    ( 86)    ( 89)
    Other income, net(A)                         7      2       33       22
      Income before income taxes                84    170      487      756
    Provision for income taxes                  20     55      139      248
      NET INCOME                               $64   $115     $348     $508
    Net income per common share               $.66  $1.19    $3.60    $5.28

    (A)  Primarily interest income, results from equity investments, and
foreign exchange gains and losses.

Depreciation/amortization expense for the twelve months ended 12/31/96 and
12/31/95 was $222 million and $233 million, respectively.

                            ARCO CHEMICAL COMPANY
                           SALES VOLUME STATISTICS
                                     Three Months             Twelve Months
                                   Ended December 31        Ended December 31
                                                 (Unaudited)
                                    1996      1995           1996      1995
    PO and Derivatives (mm lbs.)     858       875          3,351     3,476
    SM and Derivatives (mm lbs.)     567       614          2,647     2,579
    TBA and Derivatives (mm gals.)   272       278          1,107     1,140

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