Chevron Swings to a Profit
January 27 2017 - 9:36AM
Dow Jones News
By Anne Steele
Chevron Corp. swung to a profit in the latest quarter as the
company slashed expenses amid a tough pricing environment.
Still, earnings came in sharply below estimates, and shares of
the No. 2 energy company in the U.S. fell 2.9% premarket to
$113.13.
Chief Executive John Watson said results reflect the low oil and
gas prices during the year.
"We responded aggressively to those conditions, cutting capital
and operating expenses by $14 billion." He added that the company
should show improved earnings and be cash-flow-balanced in 2017
through continued tight spending and cost control as well as
additional revenue from expected production growth.
Accordingly, the company increased its 2016 annual dividend
payout for the 29th consecutive year. The company raised its
dividend payment for the fourth quarter by a penny, or 0.9%, to
$1.08.
During the latest quarter, the company's average sales price per
barrel of crude oil and natural gas liquids was $40, up from $35 in
the year-ago period.
Pressured by the prolonged swoon in oil prices cutting into
profitability, the San Ramon, Calif.-based company has looked to
cut costs. Chevron has said it would cut about 8,000 jobs -- up to
12% of its workforce -- and slash billions of dollars from its
capital-spending budget to deal with market conditions.
In all for the December period, Chevron reported a profit of
$415 million, or 22 cents a share, compared with a loss of $588
million, or 31 cents a share, the year before, and well below the
64 cents analysts polled by Thomson Reuters were looking for.
But revenue climbed 7.7% to $31.5 billion, topping analyst
estimates for $30.3 billion.
Profit in Chevron's downstream, or refining, operations plunged
65% to $357 million in the latest quarter.
Upstream operations, which include exploration and drilling,
meanwhile, in the U.S., swung to a $121 million profit from a $1.95
billion loss a year earlier, mostly owing to lower depreciation,
exploration and operating expenses, and higher crude oil and
natural gas realizations.
Rival Exxon Mobil Corp., the largest U.S. oil company, is set to
report earnings next week.
(END) Dow Jones Newswires
January 27, 2017 09:21 ET (14:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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