By Chelsey Dulaney
Chevron Corp. said its first-quarter earnings dropped 43%, but
strength in its refining segment and currency fluctuations helped
offset tumbling crude oil prices, pushing the results above
estimates.
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.
Global oil-equivalent production in the quarter rose to 2.68
million barrels a day, up from 2.59 million barrels a year ago.
The results come a day after Exxon also posted a sharp drop in
profit, yet beat Wall Street estimates.
Both companies have moved to trim spending as the collapse in
oil prices has wiped billions of dollars from their its cash flow,
and Chevron has said it would stop buying back its shares.
Chief Executive John Watson added Friday that the company is
reducing costs and pacing new project approvals. In the latest
quarter, capital spending fell to $8.6 billion from $9.4 billion a
year ago.
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 rose to $1.42 billion from $710
million. The segment benefited from lower feedstock costs.
Meanwhile, earnings from exploration and production--known as
the upstream segment--fell to $1.56 billion from $4.31 billion.
In its U.S. upstream segment, the average sales price for oil
and natural-gas liquids was $43 a barrel, down from $91 a year
ago.
In all, Chevron reported earnings of $2.57 billion, or $1.37 a
share, down from $4.51 billion, or $2.36 a share, a year earlier.
Currency fluctuations added $580 million to earnings, versus a
year-earlier hit of $79 million.
Revenue fell 35% to $34.56 billion.
Analysts polled by Thomson Reuters had forecast earnings of 79
cents a share and revenue of $24.37 billion.
Shares edged up 0.4% to $111.55 premarket. The stock is down 1%
this year through Thursday's close.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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