Global integrated firm
) released its third-quarter 2012 interim update, covering the
first 2 months of the quarter. On the whole, the update is bearish,
with earnings expected to move down from the previous quarter.
CHEVRON CORP (CVX): Free Stock Analysis Report
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The company expects results for the Exploration and Production arm
to be lower sequentially due to losses associated with foreign
exchange along with reduced realizations. However, gains from asset
disposition are expected to partially negate these factors.
The San Ramon, California-based integrated firm added that third
quarter refining and marketing results would also disappoint
compared to the second quarter of 2012, bruised by the influence of
negative timings, less realized margins and other unfavorable
Additionally, Chevron expects net after-tax charges associated with
corporate and other activities to be between $300 million and $400
For the first two months of the September quarter, Chevron reported
that oil and natural gas production averaged 2.518 million
oil-equivalent barrels per day as compared with 2,599
oil-equivalent barrels per day recorded in the third quarter of
2011, due to reduced volumes both in the U.S. and overseas.
Production also reduced by about 4% from the second quarter of
Chevron's total domestic oil equivalent production dipped 19,000
barrels per day from the previous-quarter levels, primarily due to
the impact of Hurricane Isaac. Net international oil equivalent
production also decreased 87,000 barrels per day from the second
U.S. crude price realizations during July-August 2012 averaged
$95.44 per barrel, down from $103.91 in the second quarter, while
international realizations for liquids slipped $2.35 to $96.86 per
Chevron's domestic realized natural gas prices for the 2-month
period averaged $2.67 per thousand cubic feet (Mcf), higher than
$2.17 in the preceding quarter. However, average international
natural gas realizations decreased 11 cents per Mcf to $5.99.
Regarding downstream operations, the second-largest U.S. oil
company by market value after
Exxon Mobil Corp.
) said that its U.S. refinery crude-input went down sequentially
92,000 barrels per day as a result of the closure of the Richmond,
California plant in early August.
Refinery crude-input volumes outside the U.S. climbed 42,000
barrels per day during the period, aided by the changes in the
reporting format of Star Petroleum Refining Company, Thailand.
Third quarter refining margins increased $3.05 per barrel
sequentially on the U.S. West Coast and substantially by $3.30 per
barrel on the Gulf Coast.
Third Quarter Estimate
Chevron plans to release its quarterly results on Friday, November
2, 2012, before the opening bell. The Zacks Consensus Estimate for
Chevron's third quarter is $3.06 per share, lower than the earnings
of $3.69 in the year-ago period and $3.56 in the previous quarter
(both excluding adjustments for foreign-currency effects).
Chevron currently holds a Zacks #3 Rank (Hold) stock, implying that
it is expected to perform in line with the broader U.S. equity
market. Moreover, we are also maintaining our long-term Neutral
recommendation on the stock