Oil company earnings have slumped from record year-ago levels as crude prices eased and higher costs crimped refining and chemical profits. Results remain strong by historical standards but are well off year-ago levels.
The company earned $6.5 billion, down from $11.2 billion in the same period last year. Adjusted profit was $3.05 a share, compared to analysts’ expected $3.75 per share, according to LSEG data.
Shares fell 5.4% to $146.40 in early trading.
Exxon and TotalEnergies also posted lower third-quarter results on weaker crude oil and refining profits with Exxon’s profit down 54% and TotalEnergies’ off 35%.
Chevron agreed to buy U.S. rival Hess Corp for $53 billion in an all-stock deal that expands its shale and deepwater oil production and reserves.
In addition to Hess, it acquired U.s. shale oil and gas producer PDC Energy and a majority stake in ACES Delta, a U.S. hydrogen storage firm.
“It is going to be a rough day for CVX shareholders,” wrote RBC analyst Biraj Borkhataria, who described the earnings shortfall as “disappointing,” but blamed it on non-recurring items.
Profit from pumping oil and gas fell about 38% to $5.76 billion in the quarter from $9.3 billion a year ago.
Overall, volumes rose 4% to 3.15 million barrels of oil and gas per day (boed) on the PDC Energy deal, which increased the production of less-lucrative natural gas by 25%. Chevron pumped 3.03 million boed a year ago.
Oil prices recently rebounded from a mid-year slump as tighter supplies drove up crude prices. The company’s cash flow from operations fell to $9.7 billion from $15.3 billion a year ago.
Its refining business posted an operating profit of $1.68 billion, down from $2.53 billion a year ago on sharply lower results outside the United States. Gains by its U.S. refining business were offset by weakness overseas, where margins and inputs fell.
Reporting by Mrinalika Roy in Bengaluru and Gary McWilliams in Houston; Editing by Arun Koyyur, Chizu Nomiyama and Mark Porter – Reuters