CVX Chevron Corporation

By Dave Sebastian 

Chevron Corp. swung to a loss for the September quarter as the Covid-19 pandemic continued to sap oil demand and crude prices remained low.

The San Ramon, Calif.-based oil company on Friday posted a third-quarter loss of $207 million, or 12 cents a share, compared with a profit of $2.58 billion, or $1.36 a share, in the comparable quarter last year. The company reported a $8.27 billion loss for the second quarter.

Adjusted earnings were 11 cents a share in the latest quarter. Analysts polled by FactSet were expecting an adjusted loss of 26 cents a share.

Revenue fell 32.3% to $24.45 billion from the year-ago period. Analysts were looking for $25.84 billion.

"Third quarter results were down from a year ago, primarily due to lower commodity prices and margins resulting from the impact of Covid-19," said Michael Wirth, Chevron's chairman and chief executive. "The world's economy continues to operate below pre-pandemic levels, impacting demand for our products which are closely linked to economic activity."

World-wide oil-equivalent production declined 7% to 2.83 million barrels a day during the quarter, Chevron said.

Downstream earnings, which represents much of the company's operations after it pumps oil out of the ground, fell to $141 million from $389 million. U.S. upstream earnings dropped to $116 million from $727 million due to curtailed production and low prices.

Chevron said earlier this year it would cut its spending by $4 billion, or 20%. It plans to lay off as much as 15% of its staff. The sector's largest companies have also announced layoffs and cut billions of dollars from capital budgets, with Exxon Mobil Corp. on Thursday saying it expects to shed as much as 15% of its global workforce over the next year.

Despite a modest economic recovery, oil-and-gas companies are being hammered by a sustained drop in consumption of gasoline and jet fuel as millions of people work from home and avoid driving and flying during the pandemic. In Europe, new lockdowns in response to climbing Covid-19 cases are damping hopes that the global economy will regain its footing this year. Longer-term concerns also linger about future competition from renewable energy and electric vehicles to drag down the value of many oil-and-gas companies to decade lows.

Nevertheless, Chevron has shown a willingness to spend despite the market uncertainty. It entered the pandemic with a relatively strong balance sheet and in July agreed to buy Noble Energy Inc. for about $5 billion, the largest oil-patch tie-up since the pandemic took hold.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

October 30, 2020 07:32 ET (11:32 GMT)

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