Chevron Q4 Profit Down 32% On Lower Output, Refining Margins

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(RTTNews.com) - Chevron Corp. ( CVX ) on Friday reported a 32 percent decline in profit for the fourth quarter from last year, hurt by lower oil production and refining margins. Production for the quarter declined 3 percent from last year and revenues missed analysts' expectations.

John Watson, chairman and CEO of Chevron said, "Global crude oil prices and refining margins were generally lower in 2013 than 2012. These conditions, as well as lower gains on asset sales and higher expenses, resulted in lower earnings."

San Ramon, California-based Chevron reported net income for the fourth quarter of $4.93 billion or $2.57 per share, down from $7.25 billion or $3.70 per share in the prior-year quarter.

On average, eighteen analysts polled by Thomson Reuters expected the company to report earnings of $2.57 per share for the quarter. Analysts' estimates typically exclude special items.

The second-largest U.S. oil company by market capitalization after Exxon Mobil Corp. ( XOM ) said its total revenues and other income for the quarter declined 7 percent to $56.16 billion from $60.55 billion in the same quarter last year. Analysts had a consensus revenue estimate of $63.14 billion.

Sales and other operating revenues for the quarter declined 4 percent to $53.95 billion from $56.25 billion in the prior-year quarter.

Chevron's worldwide net oil-equivalent production in the quarter declined 3 percent to 2.58 million barrels per day or MB/D from 2.67 MB/D in the prior-year quarter. The company noted that production increases from project ramp-ups in the U.S. and Nigeria were more than offset by normal field declines and lower cost recovery volumes.

The company's average sales price per barrel of crude oil and natural gas liquids was $90 in the fourth quarter, down from $91 a year ago. Meanwhile, the average sales price of natural gas rose to $3.35 per thousand cubic feet from $3.22 in the prior-year period.

Chevron's upstream earnings for the quarter declined 29 percent to $4.85 billion from $6.86 billion in the prior-year quarter.

Of this, U.S. upstream earnings decreased 41 percent from last year to $803 million, hurt by lower crude oil production as well as higher operating, income tax, depreciation and exploration expenses.

Meanwhile, international upstream earnings declined 26 percent to $4.05 billion, primarily due to the absence of a $1.4 billion gain on an asset exchange in Australia, and higher exploration expenses. Foreign currency effects increased earnings by $300 million in the latest quarter, compared with a decrease of $34 million a year earlier.

Chevron's downstream or refining segment earnings for the quarter were $390 million, down 58 percent from $925 million last year.

U.S. downstream earnings declined 20 percent from the prior-year quarter to $265 million, hurt by higher operating expenses reflecting repair and maintenance activity at company refineries and lower margins on refined product sales. This was partially offset by higher gains on asset sales.

International downstream operations earned $125 million in the quarter, down 79 percent from the year-ago period. The decline reflects lower gains on asset sales, lower margins on refined product sales, an unfavorable change in price effects on derivative instruments and higher income tax expenses. Foreign currency effects decreased earnings by $96 million in the quarter.

Chevron's worldwide capital and exploratory expenditures for the quarter were $12.96 billion, up from $11.56 billion in the year-ago period.

For fiscal 2013, Chevron reported net earnings of $21.42 billion or $11.09 per share, down from $26.18 billion or $13.32 per share in the prior year.

Total revenues and other income decreased 5 percent to $228.85 billion from $241.91 billion last year. Sales and other operating revenues declined to $220.16 billion from $230.59 billion in the previous year.

Street expected the company to earn $11.21 per share for the year on revenues of $233.80 billion.

In Friday's regular session, CVX is trading at $112.05, down $4.40 or 3.78 percent on a volume of 2.06 million shares.

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This article appears in: News Headlines

Referenced Stocks: CVX , TRI , XOM

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