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Summary
- Chevron’s earnings fell from a year ago despite beating profit expectations
- CEO Michael Wirth emphasizes cost cuts and portfolio optimization
- Chevron plans to move HQ to Texas, open $1-billion engineering center in India
(Reuters) – Chevron Corp beat Wall Street estimates for third-quarter profit on Friday, helped by higher oil and gas output, but its earnings fell from a year ago.
The U.S. company, whose proposed $53-billion has been delayed due to a challenge by rivals Exxon Mobil  and CNOOC Ltd
Shares rose 2.6% before normal trading hours.
Oil industry profits have sagged this year due to softer crude prices and weaker fuel demand growth. Oil futures in the quarter ended Sept. 30 averaged 17% below the prior quarter, and global fuel margins have suffered from slowing demand growth and excess supplies.
European oil majors BP and TotalEnergies this week also posted weaker results on sharp year-over-year declines in refining margins, lower oil prices and gas-trading profits. Exxon Mobil also posted higher than expected profit on raised oil production, but profit fell 5% from a year ago.
Chevron said it earned $2.51 per share for the quarter on an adjusted basis, compared to analysts’ estimates of $2.42 according to LSEG data, helped by a 7% year-over-year increase in oil and gas volumes and operating cost cuts. Year-ago adjusted profit was $3.05 per share.
“We also are taking steps to optimize our portfolio and reduce operating costs to deliver superior long-term value to shareholders,” CEO Michael Wirth said in a statement.
The company plans to move its headquarters to Texas from California, and to open a new, nearly $1-billion engineering center in India. It disclosed pending sales of oil properties in Canada, Alaska and Congo that will generate about $8 billion. All three sales are expected to close this quarter, the company said.
Operating profits were down compared to a year ago in both its major units. Earnings from pumping oil and gas fell 20% to $4.59 billion while profit from refining oil into gasoline and diesel tumbled 65%, to $595 million. Chemical earnings were up compared to a year ago.
After two years of strong motor-fuels profits, the industry has been slow to adapt to slowing demand growth, excess supplies from producers running plants at high levels and new refineries coming online in Asia and Africa.
Chevron’s third-quarter results were hurt by outages at a California refinery and a loss of production from well shut-ins due to planned maintenance and bad weather.
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