Chevron warns on Q3 profit; Richmond out through Q4
(Reuters) - Chevron Corp (CVX.N) warned that third-quarter profits would be "substantially lower" than the previous quarter as a hurricane and maintenance curbed its oil and gas output and a fire hit its refining arm.
Chevron's shares fell 1.2 percent in after-hours trading.
The second-largest U.S. oil company said on Tuesday that the key crude unit at its oldest refinery in Richmond, California, would remain offline through the fourth quarter after it was badly damaged in an August 6 fire.
The impact was apparent as its average U.S. refinery input fell 92,000 barrels per day (bpd) to 836,000 bpd in July and August, when compared with the second quarter average. This largely reflected the Richmond unit shutdown, it said, and was only partially offset by higher international refinery output.
On the upstream side, Chevron's average U.S. production of oil and gas from wells fell to 640,000 bpd in July and August, compared with an average of 659,000 bpd for all of the second quarter. This stemmed largely from shutting down in the Gulf of Mexico for Hurricane Isaac in August.
Worldwide, Chevron produced the oil equivalent of 2.52 million bpd in the first two months of the quarter, down from an average 2.62 million in the second quarter. Planned maintenance in the UK and Kazakhstan caused most of the international decline, Chevron said in the quarterly interim update.
"The company expects increased production in the fourth quarter 2012 compared to the third quarter 2012, reflecting the completion of planned turnarounds and restoration of shut in production in the Gulf of Mexico," Chevron said in a statement.
The company warned in July that it would fall short of its original full-year 2012 forecast of 2.68 million bpd.
Prices for what Chevron extracted offered no relief, since the third-quarter average Brent oil price of $110 per barrel is down $2 on a year ago, and up only $1 on last quarter.
Before the interim update, analysts had expected a net profit of $3.06 per share for the third quarter, according to Thomson Reuters I/B/E/S, down from $3.56 in the second quarter and $3.67 in the same quarter a year before.
But William Rutherford, president of Portland, Oregon-based Rutherford Investment Management and a long-term Chevron shareholder, saw the stock as a proxy for the energy sector and had no doubt the management would turn things around.
"They've had a good record. I'm not concerned," he said.
Shares of Chevron, which closed at $117.36 prior to the warning, were down to $115.91 in after-hours trading on Tuesday.
The stock had posted a gain of 12 percent in the past three months, while larger rival Exxon Mobil Corp (XOM.N) was up 10 percent in that time. San Ramon, California-based Chevron is due to report earnings on November 2.
(Reporting by Braden Reddall in San Francisco; editing by Carol Bishopric)