Chevron fourth-quarter profit misses on refining weakness, shares drop

FILE PHOTO: A Chevron gas station sign is shown in Cardiff, California, in this January 25, 2016 photo. REUTERS/Mike Blake/File Photo

HOUSTON (Reuters) - U.S. oil producer Chevron Corp posted a lower-than-expected quarterly profit on Friday as sales slumped in its international refining business, sending shares down nearly 2 percent.

The miss in profit comes the same day that rival Exxon Mobil Corp reported lower-than-estimated earnings, also due to trouble in its refining arm, fueling concerns a weak spot could be emerging in the industry just as oil prices rise.

Chevron posted fourth-quarter net income of $3.1 billion, or $1.64 per share, compared with $415 million, or 22 cents per share, a year ago. Chevron recorded a $2 billion noncash benefit in the period related to the recent U.S. tax overhaul.

Excluding the tax change and other one-time items, Chevron earned 72 cents per share. By that measure, analysts expected earnings of $1.22 per share, according to Thomson Reuters I/B/E/S.

Production rose 3 percent to 2.7 million barrels of oil equivalent per day. Its international refining division recorded a 77 percent drop in profit due to lower margins on gasoline and other products.

Mike Wirth became Chevron’s chairman and chief executive officer on Thursday, replacing the retiring John Watson.

The company is slated to hold a conference call with investors on Friday morning.

Chevron boosted its quarterly dividend this week by 4 percent.

Shares fell 1.8 percent to $123.25 in early trading.

Reporting by Ernest Scheyder; Editing by Chizu Nomiyama and Jeffrey Benkoe