Chevron expects to post lower 3Q results
SAN RAMON, Calif. (AP) — Chevron Corp. could shed some light on the status of its California refinery and overseas operations Friday when it reports third-quarter earnings before the market opens.
WHAT TO WATCH FOR: Chevron already has warned investors to expect substantially lower earnings in a quarter affected by a hurricane, a refinery fire and slowing economic growth.
The sluggish global economy has cut into demand for energy products from gasoline to jet fuel. Concerns about economic growth have caused oil and natural gas prices to fall, which can hurt the bottom line for oil producers.
Against that backdrop, Chevron said production fell in July and August as operations were disrupted by Hurricane Isaac's push through the Gulf of Mexico and planned maintenance on some international facilities.
In addition the company closed a crude unit that was damaged in early August by a fire at a refinery in Richmond, Calif. The unit isn't expected to reopen until next year.
Chevron also sold oil at lower prices in the first two months of the quarter, compared with the third quarter of 2011. Natural gas prices increased slightly.
Chevron also is facing some challenges internationally. Last month, a Brazilian court ordered the company to suspend oil drilling and transportation in the country pending an investigation into two oil spills. Chevron later paid $17.3 million for irregularities in connection with the spills and said it will make improvements in its processes.
Shares of Chevron rose 10.5 percent during the quarter, ending at $116.56 on Sept. 28.
WHY IT MATTERS: Chevron is the second-largest oil company in the U.S., behind Exxon Mobil Corp. Like its peers, the San Ramon, Calif., company continues to look for resources around the world to increase its reserves.
WHAT'S EXPECTED: Analysts expect earnings of $2.83 per share on revenue of $67 billion. Chevron anticipates one-time charges to be at least $300 million to $400 million after taxes stemming from corporate and other activities.
LAST YEAR'S QUARTER: Chevron, based in San Ramon, Calif., reported net income of $7.83 billion, or $3.92 per share. Revenue totaled $61.3 billion.
