Los Angeles Times

Chevron profit drops 32% on lower production, prices

- Associated press

Chevron Corp.’s profit fell 32% in the fourth quarter on lower oil and gas production and lower prices for refined fuels relative to the cost of crude.

The nation’s second-biggest oil company Friday reported net income of $4.93 billion on revenue of $53.95 billion for the final three months of 2013. That’s down from profit of $7.25 billion on revenue of $56.25 billion during the same period of 2012.

Chevron earned $2.57 a share, a penny less than analysts polled by FactSet had expected.

Chevron had signaled that results would be relatively weak in a recent update for investors, and the company met those diminished expectatio­ns, said Brian Youngberg, an analyst at Edward Jones. He called the results “not disappoint­ing, but more like mediocre.”

Despite the U.S. oil and gas boom, Chevron’s domestic production fell 4% in the quarter as increases in Pennsylvan­ia and Texas were offset by declining production in older fields. Chevron’s internatio­nal production fell 3% in the quarter.

The San Ramon, Calif., company has been championed by investors in recent years for providing the best growth among major integrated oil companies.

But growth stalled last year and Chevron said Friday that production would rise less than 1% in 2014. Better growth is expected in 2015 and 2016.

This is even though Chevron spent $41.9 billion on new projects around the world in 2013, a record for the company, up from $34.2 billion in 2012.

Although it’s frustratin­g to see the growth pushed back, Youngberg said, he does expect it to come.

Chevron “was hitting on all cylinders for quite a while there, but since the fall they’ve lagged,” he said.

Chevron’s refining earnings fell 58% compared with a year earlier because the prices received for refined fuels and chemicals were low compared with the cost of the crude oil used to make them.

Refining margins did improve slightly compared with the third quarter, however, which suggests that the market may be improving for Chevron.

For all of 2013, Chevron earned $21.42 billion, or $11.09 a share, on revenue of $220.16 billion. That’s down from net income of $26.18 billion, or $13.32 a share, on revenue of $230.59 billion in 2012.

Chevron shares fell $4.82, or 4.1%, to $111.63 on Friday. It was the worst-performing energy producer in the Standard & Poor’s 500 index.

 ?? David Paul Morris ?? A CUSTOMER FILLS a vehicle with gasoline at a Chevron station in San Francisco last year. The company reported a fourth-quarter profit of $4.93 billion.
David Paul Morris A CUSTOMER FILLS a vehicle with gasoline at a Chevron station in San Francisco last year. The company reported a fourth-quarter profit of $4.93 billion.

Newspapers in English

Newspapers from United States