Record energy prices gave Chevron Corp., the nation's second-largest oil company after ExxonMobil Corp., a bigger-than-expected profit gain during the first quarter despite weak income from making and selling gasoline, the company said Friday.
In the January-March quarter, San Ramon, Calif.-based Chevron posted net income of $5.2 billion, or $2.48 a share, up from $4.7 billion, or $2.18 a share, in the year-earlier quarter. Revenue increased 40 percent to $64.7 billion. With earnings coming in 7 cents a share higher than analysts had forecast in a survey by Thomson Financial, Chevron turned in the kind of performance analysts had been anticipating — and didn't get — from ExxonMobil a day earlier.
Like ExxonMobil, Chevron reported output declines in oil production and refined products, but they were smaller by comparison. Analysts said Chevron was able to allay concerns about setbacks in new oil production projects.
Chevron has the best placed projects and the best chance for decent growth in production, but they had been experiencing lots of delays, and that makes you worry about execution risks. It's reassuring to see that they are getting projects under way," said analyst Phil Weiss of Argus Research.
Arjun Murti and three colleagues at Goldman Sachs said in a note that they expected Chevron's production volume to increase in the second half of the year and to rise by as much as 6 percent in 2009.
During the quarter, Chevron boosted its cash to $8.2 billion, up from $7.4 billion in the year-earlier period, increased capital spending on exploration, production and refinery projects by $1 billion to $5.1 billion and still had enough change left over to buy back $2 billion of its stock.
The only negative news for the company was an 84 percent decline in earnings from the division that operates refineries and service stations, falling to $252 million from $1.6 billion in the first quarter of 2007.
Chevron's shares rose 38 cents to $95.32.
While good news for the oil companies' shareholders, the industry's latest earnings gusher may provide more fodder for U.S. lawmakers who have been threatening to impose a windfall tax.
In the January-March quarter, San Ramon, Calif.-based Chevron posted net income of $5.2 billion, or $2.48 a share, up from $4.7 billion, or $2.18 a share, in the year-earlier quarter. Revenue increased 40 percent to $64.7 billion. With earnings coming in 7 cents a share higher than analysts had forecast in a survey by Thomson Financial, Chevron turned in the kind of performance analysts had been anticipating — and didn't get — from ExxonMobil a day earlier.
Like ExxonMobil, Chevron reported output declines in oil production and refined products, but they were smaller by comparison. Analysts said Chevron was able to allay concerns about setbacks in new oil production projects.
Chevron has the best placed projects and the best chance for decent growth in production, but they had been experiencing lots of delays, and that makes you worry about execution risks. It's reassuring to see that they are getting projects under way," said analyst Phil Weiss of Argus Research.
Arjun Murti and three colleagues at Goldman Sachs said in a note that they expected Chevron's production volume to increase in the second half of the year and to rise by as much as 6 percent in 2009.
During the quarter, Chevron boosted its cash to $8.2 billion, up from $7.4 billion in the year-earlier period, increased capital spending on exploration, production and refinery projects by $1 billion to $5.1 billion and still had enough change left over to buy back $2 billion of its stock.
The only negative news for the company was an 84 percent decline in earnings from the division that operates refineries and service stations, falling to $252 million from $1.6 billion in the first quarter of 2007.
Chevron's shares rose 38 cents to $95.32.
While good news for the oil companies' shareholders, the industry's latest earnings gusher may provide more fodder for U.S. lawmakers who have been threatening to impose a windfall tax.
Source: Los Angeles Times & Associated Press|by By RONALD D. WHITE
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