Chevron Corp. (NYSE: CVX), the second-largest U.S. energy producer by market value, reported third-quarter profit below estimates as weaker refining margins eroded gains from higher commodity prices and output from wells.
Net income was $4.95 billion, or $2.57 a share, compared with $5.25 billion, or $2.69, a year earlier, the San Ramon, Calif.-based company said in a statement on Nov. 1. The per share result was 13 cents lower than the $2.70 average of 21 analysts’ estimates compiled by Bloomberg.
Chevron warned in an Oct. 9 statement that quarterly profit had been eroded by “significantly lower” earnings in its so-called downstream business, which includes refining and filling stations. Maintenance work at the company’s El Segundo, Calif., refinery mostly offset an increase in fuel production at a separate Chevron plant near San Francisco, according to the statement.
Chairman and CEO John S. Watson is spending $36.7 billion this year in a push to raise oil and natural gas production by 1.5% to the equivalent of 2.65 million barrels of oil a day. The capital spending budget represents a 7.3% increase from 2012.
Chevron’s stock has increased 11% this year, outperforming the company’s bigger U.S. rival, Exxon Mobil Corp. (NYSE: XOM), which has gained less than 3%. The statement on Nov. 1 was released before the opening of regular U.S. stock trading. Chevron fell 0.3% to $119.96 in New York on Oct. 31.