Chevron profit up with refining, beats view
NEW YORK (Reuters) - Chevron Corp (CVX.N) posted a better-than-expected 24 percent rise in quarterly earnings on Friday on higher profit from its refineries and a gain from the sale of its stake in power company Dynegy Inc (DYN.N).
Refining margins hit near-record rates during the quarter, propping up profits at integrated oil companies -- which both produce and refine oil and gas -- as commodity prices dipped.
Still, the second quarter was a mixed bag for the sector as lower output and crude oil prices outweighed strong refining profit at some large oil companies.
Chevron's net income in the quarter increased to $5.38 billion, or $2.52 a share, from $4.35 billion, or $1.97 a share, a year earlier.
Excluding a gain of $680 million on the sale of Dynegy stock and a loss of $160 million on debt redemption, the company earned about $2.37 a share. On that basis, analysts' average forecast was $2.30 a share, according to Reuters Estimates.
The company's production in the quarter dropped about 1 percent to 2.63 million barrels of oil equivalent per day due to changes in ownership at its operations in Venezuela and lower U.S. production.
Chevron said it expects 2007 second-half production to be in line with the first half at about 2.64 million barrels of oil equivalent per day.
"We're starting to see that real growth in production is taking some time," said James Halloran, energy analyst with National City Private Client Group, which manages about $35 billion in assets.
He added, "They are bringing on new projects, but they keep getting offset by either higher decline rates than anticipated, the effects of production-sharing agreements, or by glitches like Venezuela," where the government has nationalized some assets.
STRUGGLE TO RAISE OUTPUT
Oil companies have labored of late to boost production as resource-rich countries around the world have tightened their grip on their stocks of oil and gas.
Exxon Mobil Corp. (XOM.N) and BP Plc (BP.L) both posted 1 percent drops in second-quarter profit, due in part to falling production.
ConocoPhillips (COP.N) and Royal Dutch Shell (RDSa.L) posted better-than-expected second-quarter profit on the strength of their refining operations.
Chevron's second-quarter revenue rose to $56.09 billion from $53.54 billion last year.
Income from its downstream segment -- which includes its refining, marketing and transportation businesses -- rose 30 percent to $1.3 billion. Continued...
