Chevron profits down 27 pct but still top estimates

Credit: REUTERS/Mike Blake

By Gary McWilliams

HOUSTON, April 26 (Reuters) - Chevron Corp CVX.Nsaid on Friday first-quarter profits slid 27 percent from a year earlierdue to lower crude oil prices and weaker margins in its refining and chemicals businesses, but the No. 2 U.S. oil and natural gas producer still topped forecasts.

Shares of San Ramona, California-based Chevron rose slightly to $118.40 in pre-market trading. Earlier this week, Chevron found itself in a takeover duel for Anadarko Petroleum Corp APC.N, a smaller oil and gas producer, when Occidental Petroleum Corp ONY.X made a $38 billion offer that topped Chevron's bid.

Chavron's overall oil and gas production rose during the quarter, and profits in its U.S. exploration business jumped 15 percent from a year earlier. But weakness in refining and international exploration knocked overall profit down 27 percent on a 6.8 percent decline in revenue.

"Earnings declined from a year ago largely due to lower crude oil prices and weaker downstream and chemicals margins," said Michael Wirth, Chevron chief executive officer.

Wirth signalled that Chevron considers itself on track to make a deal for Anadarko. He said combining the shale, deepwater and liquefied natural gas businesses of the two companies "will unlock significant value to shareholders."

Chevron's daily production of oil and gas rose to 3.04 billion of barrels, from 2.85 billions of barrels in the year-ago period. But the price for each barrel of U.S. crude oil and natural gas liquids fell to $48 from $56 a year earlier. Chevron's take from international output, slipped to $58 per barrel from $61 a year earlier.

The lower prices and weakness in refining impact dropped first quarter net income to $2.65 billion, or $1.39 per share, from $3.64 billion, or $1.90 per share, a year earlier.

Revenue fell nearly 7 percent to $35.2 billion from $37.64 billion a year ago.

Rival Exxon Mobil Corp XOM.Non Friday reported its earnings were well below analysts' estimates, citing the effects of weaker crude prices, heavier maintenance and weaker margins in its refining and chemicals businesses.

Exxon shares were off 2.4 percent at $80.25 in pre-market trading.

(Additional reporting by Arathy S Nair in Bengaluru; Editing by David Gregorio)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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