Chevron says oil prices helped 2Q earns v. 1Q
HOUSTON — Chevron Corp. said Thursday its second-quarter earnings from pumping oil will be improved from the first three months of the year, when low crude and natural-gas prices contributed to the worst results in years for oil companies.
But the nation’s second-largest oil company said earnings from refining fuel will be far lower versus the first quarter. Chevron said it was hurt by significantly lower refining margins in the U.S.
It also noted that foreign currency effects related to the weak dollar would crimp the bottom line.
On a year-over-year basis, Chevron’s overall second-quarter results are forecast to be much lower than those for 2008.
Benchmark crude soared to record levels near $150 a barrel one year ago before plunging below $35 this year. But prices began to rebound at the end of the first quarter and on Thursday hovered around $60 a barrel.
During the first two months of the second quarter, Chevron said the price it received for crude averaged $48.79 a barrel, up from $36.85 in the first three months of the year but not even close to the $113.97 a barrel it averaged in the year-ago quarter.
Natural gas prices for the first two months of the second quarter averaged $3.26 for 1,000 cubic feet. That’s below the $4.14 it realized in the first quarter and well off the $9.84 it got a year ago.
The San Ramon, Calif.-based oil giant provided the guidance in an overview of market conditions for the April-June period.
Chevron didn’t provide any specific earnings projections, but Wall Street is expecting its results to be significantly lower than a year ago. Chevron is set to report second-quarter earnings July 31.
For now, the average earnings estimate among analysts surveyed by Thomson Reuters is $1.28 a share, well off the $2.90 a share Chevron posted in the year-ago period, when crude prices were on their way to record heights.
During April and May, Chevron said production rose 11,000 barrels of oil equivalent per day. It pegged the jump primarily to the restoration of operations in the Gulf of Mexico following last year’s hurricanes.
For those same two months, the company said results from its overseas exploration and production operations included unfavorable foreign currency effects of more than $400 million. The reason, Chevron said, was the weakening dollar against most other major currencies, and it said the trend continued in June.
For the full second quarter, Chevron said U.S. refining margins fell sharply from both the first quarter and the year-ago period. Abroad, refining margins were mixed.
The company also said its quarterly after-tax charges for corporate and other activities will range between $250 million and $350 million.
Chevron shares fell $1.18 to $61.90 in after-hours trading. They’ve traded in a range of $55.50 to $96.79 in the past year.
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