Chevron income falls to $5.3 billion
New York, November 3, 2012
Chevron posted much lower-than-expected quarterly earnings yesterday as maintenance exacerbated a steady decline in oil and natural gas production and a fire at one of the company's California plants hit the refining business.
Increasing output has been a struggle for many big oil companies, including ExxonMobil and Royal Dutch Shell.
With oil and gas assets tightly controlled by the countries where they are located, the majors are left to drill in pricier regions on land and offshore.
Chevron's third-quarter oil and gas production fell to 2.52 million barrels of oil equivalent per day from 2.60m bpd a year earlier.
On quarter-to-quarter basis, the production number declined for the third period in a row.
Net income in the quarter fell to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.
Earnings dropped 17 per cent to $5.1 billion in the oil and gas production business and plunged 65 per cent to $689 million in the refining, or downstream operation.
"Downstream was the primary culprit behind the miss," Simmons & Company analysts said in a note to investors. The reported profit included about $600 million from an asset sale gain, offset by a negative foreign exchange impact, they said.
Leaving out certain items, Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83, according to Thomson Reuters I/B/E/S. – TradeArabia News Service