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Chevron Q1 Profit Rises; Exxon Mobil Slips To Loss

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Chevron Corp. (CVX) reported a profit for the first-quarter that increased 35.8 percent from last year, reflecting downstream margins and increased Permian production, partially offset by lower commodity prices. But, Exxon Mobil Corp. (XOM) posted a first-quarter loss, compared to profit last year, hurt by $2.9 billion non-cash charge from market-related write-downs.

Chevron and Exxon Mobil have reduced its 2020 capital expenditure guidance.

Chevron expects financial results in future periods to be depressed as long as current market conditions persist.

Chevron reported that its first-quarter earnings rose 35.8 percent to $3.60 billion from last year's $2.65 billion, with earnings per share improving to $1.93 from $1.39 last year.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the first-quarter. Analysts' estimates typically exclude special items.

The latest-quarter result included a gain of $240 million associated with the sale of upstream assets in the Philippines and favorable tax items totaling $440 million attributable to international upstream. Foreign currency effects increased earnings in the first quarter 2020 by $514 million.

The company said commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.

Chevron has further reduced its 2020 capital expenditure guidance by up to $2 billion to $14 billion. In addition, the company estimates that 2020 operating costs will decrease by $1 billion. It follows the previously announced suspension of share repurchases and the completion of additional asset sales.

Chevron's upstream segment earnings declined to $2.92 billion from $3.12 billion in the prior year, due to lower crude oil and natural gas realizations and higher depreciation expense, partially offset by higher crude oil and natural gas production.

But, Chevron's downstream segment earnings surged to $1.10 billion from $252 million in the previous year. The increase was mainly due to higher margins on refined product sales, partially offset by higher operating expenses and lower earnings from the 50 percent-owned Chevron Phillips Chemical company.

Chevron's first-quarter total revenues and other income declined to $31.50 billion from $35.20 billion last year. Analysts expected revenues of $29.38 billion for the quarter.

Meanwhile, Exxon Mobil reported that its first quarter loss attributable to the company was $610 million or $0.14 per share, compared to earnings of $2.35 billion or $0.55 per share a year earlier. The latest-quarter results included a $2.9 billion charge from identified items, or $0.67 per share, reflecting non-cash inventory valuation impacts from lower commodity prices and asset impairments.

ExxonMobil has reduced its 2020 capital spending by 30 percent and cash operating expenses by 15 percent. It now expects capex to be about $23 billion for the year, down from the previously announced guidance of $33 billion.

Earnings, excluding identified items, per share was $0.53 compared to $0.55 per share in the prior year.

Analysts polled by Thomson Reuters expected the company to report break even per share. Analysts' estimates typically exclude special items.

ExxonMobil's upstream segment earnings dropped to $536 million from last year's $2.88 billion, reflecting lower prices and reduced gas volumes partly offset by higher liquids volumes.

ExxonMobil's downstream segment loss widened to $611 million from $256 million last year.

Oil-equivalent production was 4 million barrels per day, up 2 percent from the first quarter of 2019, with a 7 percent increase in liquids partly offset by a 5 percent decrease in gas.

Total revenues and other income for the first-quarter declined to $56.16 billion from $63.62 billion last year. Analysts expected revenues of $51.85 billion for the quarter.

In Friday regular trade, CVX is trading at $89.32, down $2.68 or 2.92 percent. XOM is trading at $44.45, down $2.02 or 4.35 percent.

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