By Chelsey Dulaney
Chevron Corp. said Friday that asset sales and strength in its
refining segment helped offset tumbling crude oil prices, resulting
in better-than-expected results in its December quarter.
Still, Chevron said it plans to pare its capital spending by 13%
this year, to $35 billion, while it looks to cut costs through its
supply chain.
Chevron, the second-biggest U.S. oil company in market value
behind Exxon Mobil Corp., has been working to increase its
oil-and-gas production. But oil prices have plummeted in recent
months amid an oversupply, just as its drive begins to show
results. Oil prices have crashed more than 60% since last summer.
U.S. crude prices dipped below $44 a barrel on Thursday, the lowest
in almost six years, and closed at $44.53.
Chevron's profits are better insulated than most oil producers
because it also makes money from refining the fuel into gasoline
and diesel. The lower-cost crude has helped its refinery businesses
improve profit margins.
In the latest quarter, refining, marketing and chemical
operations, or downstream, earnings surged to $1.52 billion from
$390 million a year earlier.
Meanwhile, earnings from exploration and production, known as
the upstream segment, fell to $2.67 billion from $4.85 billion a
year earlier.
Global oil-equivalent production for the period was 2.58 million
barrels a day, unchanged from a year earlier. In its U.S. upstream
segment, the average sales price for oil and natural-gas liquids
was $66 a barrel, down from $90 a year ago.
Overall, Chevron reported earnings of $3.47 billion, or $1.85 a
share, down from $4.93 billion, or $2.57 a share, a year earlier.
Results included a net $570 million gain on asset sales.
Revenue fell 18% to $46.1 billion.
Analysts polled by Thomson Reuters had forecast earnings of
$1.63 a share and revenue of $30.65 billion.
Chevron's bottom line was helped by foreign-currency effects,
which have been a drag on many U.S. companies' results recently.
Chevron said foreign currency helped its earnings by $432 million
in the quarter, up from $202 million a year earlier.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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