U.S. energy behemoth
) released its fourth quarter 2012 interim update, covering the
first 2 months of the quarter. On the whole, the update is
bullish, with earnings expected to be significantly higher than
the previous quarter.
CHEVRON CORP (CVX): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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The company expects results for the Exploration and Production
arm to improve sequentially, thanks to gain from asset
transactions and higher output.
The San Ramon, California-based integrated supermajor added that
fourth quarter refining and marketing results would also fare
better than the third quarter of 2012, benefiting from the price
differential between oil bought and sold, partially offset by
narrower profit margins.
Additionally, Chevron expects net after-tax charges associated
with corporate and other activities to come in between $300-$400
The company reported that oil and natural gas production averaged
2.662 million oil-equivalent barrels per day, a nominal 0.8%
above the fourth-quarter 2011 level, due to minor volume
increases both in the U.S. and overseas. Production would also be
up by about 5.8% from that achieved during the third quarter of
In the first two months of the December quarter, Chevron's total
domestic oil equivalent production rose 39,000 barrels per day
from the previous quarter levels, primarily due to normalization
of the company's Gulf of Mexico operations following the impacts
of Hurricane Isaac in August and volume gains from its recently
acquired Permian Basin assets. Net international oil equivalent
production - at 1,986,000 oil-equivalent barrels per day - was
107,000 barrels per day above the third quarter of 2012. The
upsurge was driven by the completion of planned repair work in
Kazakhstan and the U.K.
U.S. crude price realizations during October-November 2012
averaged $97.61 per barrel, up marginally from $97.34 in the
third quarter 2012, while international realizations were higher
by $1.86 to $100.06 per barrel. Chevron's domestic realized
natural gas prices for this period averaged $3.14 per thousand
cubic feet (Mcf), compared with $2.63 in the third quarter.
Average international natural gas realizations were down 9 cents
per Mcf to $5.94.
Regarding downstream operations, the second-largest U.S. oil
company by market value after
Exxon Mobil Corporation
) said that its U.S. refinery crude-input fell 77,000 barrels per
day, affected largely by the ongoing shutdown of the Richmond,
California refinery crude unit after a fire in August. Refinery
crude-input volumes outside the U.S. were up a tad (by 9,000
barrels per day) during the same period.
Fourth quarter refining margins decreased $4.92 per barrel
sequentially on the U.S. West Coast and by $4.95 per barrel on
the Gulf Coast.
Fourth Quarter Estimate
Chevron plans to release its quarterly results on Friday,
February 1, 2013, before the opening bell. The Zacks Consensus
Estimate for Chevron's fourth quarter is $2.99 per share, higher
than the earnings of $2.61 per share in the year-ago period and
$2.83 per share earned in the previous quarter (both excluding
adjustments for foreign-currency effects).
Chevron is currently a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. equity market
over the next one to three months. We are also maintaining our
long-term Neutral recommendation on the stock.