(Reuters) - Chevron Corp posted on Friday a steeper-than-expected 26 percent drop in quarterly profit as lower oil prices knocked oil and gas production earnings and its U.S. refining unit slowly recovered from a refinery fire a year ago.
Shares of the second-largest U.S. oil company slipped more than 2 percent as second-quarter oil and gas volumes weakened to a level well below Chevron's full-year target.
Achieving increased production from oil wells has been a struggle for Chevron and larger rival Exxon Mobil Corp , which reported disappointing results on Thursday along with Royal Dutch Shell Plc .
Chevron's second-quarter net income fell to $5.37 billion, or $2.77 per share, from $7.21 billion, or $3.66 per share, a year earlier.
Analysts, on average, expected $2.96 per share, according to Thomson Reuters I/B/E/S. Chevron produced 2.58 million barrels of oil equivalent per day, down from 2.62 million bpd a year earlier. It is targeting 2.65 million bpd for this year, and growth of 25 percent in output by 2017.
Exploration and production earnings from outside the United States fell 10 percent to $3.87 billion, with operating expenses up and the average sale price for liquids down to $94 per barrel from $99 a year before.
Oil and gas output also declined, by 42,000 bpd. U.S. upstream earnings from exploration and production dropped 18 percent to $1.08 billion. U.S. refining and marketing earnings tumbled 83 percent as refinery crude input fell 114,000 bpd to 814,000 bpd, mainly due to the fire at its plant in Richmond, California, last August.
The damaged unit there only started up in April. Lower margins have hit U.S. refiners across the board, with the discount they had enjoyed from cheaper U.S. crude oil narrower than previous quarters.
Simmons & Co analysts highlighted the U.S. refining weakness in explaining the shortfall in Chevron profits. "US upstream performance also looks very weak relative to our expectation," the analysts said in a note to clients.
Shares of Chevron, based in San Ramon, California, declined 2.3 percent to $123.57 in early trading on Friday. The stock has comfortably outperformed peers in 2013, rising 15 percent, compared with 6 percent for Exxon.
Chevron's market capitalization of $240 billion is now larger than PetroChina - making it the world's second-largest publicly traded oil company.
Helped by its relatively large exposure to oil instead of currently cheap North American natural gas, Chevron overtook Shell in market valuation terms earlier in 2013.
yahoo.com
Shares of the second-largest U.S. oil company slipped more than 2 percent as second-quarter oil and gas volumes weakened to a level well below Chevron's full-year target.
Achieving increased production from oil wells has been a struggle for Chevron and larger rival Exxon Mobil Corp , which reported disappointing results on Thursday along with Royal Dutch Shell Plc .
Chevron's second-quarter net income fell to $5.37 billion, or $2.77 per share, from $7.21 billion, or $3.66 per share, a year earlier.
Analysts, on average, expected $2.96 per share, according to Thomson Reuters I/B/E/S. Chevron produced 2.58 million barrels of oil equivalent per day, down from 2.62 million bpd a year earlier. It is targeting 2.65 million bpd for this year, and growth of 25 percent in output by 2017.
Exploration and production earnings from outside the United States fell 10 percent to $3.87 billion, with operating expenses up and the average sale price for liquids down to $94 per barrel from $99 a year before.
Oil and gas output also declined, by 42,000 bpd. U.S. upstream earnings from exploration and production dropped 18 percent to $1.08 billion. U.S. refining and marketing earnings tumbled 83 percent as refinery crude input fell 114,000 bpd to 814,000 bpd, mainly due to the fire at its plant in Richmond, California, last August.
The damaged unit there only started up in April. Lower margins have hit U.S. refiners across the board, with the discount they had enjoyed from cheaper U.S. crude oil narrower than previous quarters.
Simmons & Co analysts highlighted the U.S. refining weakness in explaining the shortfall in Chevron profits. "US upstream performance also looks very weak relative to our expectation," the analysts said in a note to clients.
Shares of Chevron, based in San Ramon, California, declined 2.3 percent to $123.57 in early trading on Friday. The stock has comfortably outperformed peers in 2013, rising 15 percent, compared with 6 percent for Exxon.
Chevron's market capitalization of $240 billion is now larger than PetroChina - making it the world's second-largest publicly traded oil company.
Helped by its relatively large exposure to oil instead of currently cheap North American natural gas, Chevron overtook Shell in market valuation terms earlier in 2013.
yahoo.com
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