Chevron Misses on Lower Production, Prices

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Chevron Corp. (NYSE: CVX) reported third-quarter 2012 earnings this morning. The oil supermajor posted diluted earnings per share (EPS) of $2.69 on revenues of $58 billion. In the same period a year ago, the company reported adjusted EPS of $3.92 on revenues of $61.3 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $2.83 and $64.1 billion in revenues.

The company’s CEO said:

Crude oil prices were down and we had a heavy period of planned oil field maintenance which temporarily reduced oil and gas production in several locations. Foreign currency movements also hurt our results this quarter, while they benefited the year-ago period.

That about covers the field. Worldwide production fell from 2.6 million barrels of oil equivalent a day to 2.52 million barrels, and the average realized price per barrel fell from $97 to $91.

The average U.S. natural gas price declined from $4.14 per thousand cubic feet in the third quarter of 2011 to $2.63. U.S. net oil-equivalent production fell by 25,000 barrels a day (4%) to 637,000 barrels. U.S. upstream earnings were down $386 million.

Internationally, upstream earnings fell by $676 million year-over-year. Crude prices fell from an average of $103 a barrel to $98. The average price for natural gas rose from $5.50 per thousand cubic feet in the third quarter of last year to $6.03 this year.

Refinery input fell by 118,000 barrels a day and refined products sales fell by 69,000 barrels a day in the United States, mainly as a result of the refinery fire in California. International refinery input rose to 909,000 barrels a day (up 27,000 barrels), but refined products sales fell 2% due primarily to the sale of the company’s Pembroke refinery in the United Kingdom.

The company offered no guidance, but the consensus fourth-quarter estimates call for EPS of $3.11 on revenues of $66.85 billion. Full-year estimates anticipate EPS of $12.85 on revenues of $251.46 billion. Neither looks safe given this quarter’s numbers and the continuing lower price for crude oil.

Chevron’s shares are trading down about 0.6% this morning at $110.80 in a 52-week range of $92.29 to $118.53. The consensus target price for the shares was around $124.60 before today’s report.

Paul Ausick

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