Integrated energy company Chevron Corp. (CVX) on Friday reported a 4 percent decline in profit for the first quarter on lower revenues that reflect the impact of lower crude oil prices and flat production. The company's upstream as well as downstream segments reported lower earnings for the quarter.
Chevron's upstream, or production and exploration segment earnings for the quarter declined 4 percent to $5.92 billion, reflecting a decline in earnings at its U.S. operations, amid lower crude oil prices, that more than offset higher earnings at its international operations.
Worldwide net oil-equivalent production for the quarter edged up less than 1 percent from the prior-year period to 2.65 million barrels per day. Chevron noted that production increases from project ramp-ups in the U.S. and Nigeria were largely offset by normal field declines.
The company's downstream, or refining segment earnings for the quarter decreased 13 percent to $701 million.
Chevron's first-quarter net income was $6.18 billion or $3.18 per share, down from $6.47 billion or $3.27 per share in the year-ago quarter. On average, 21 analysts polled by Thomson Reuters expected the company to report earnings per share of $3.07 for the quarter. Analysts' estimates typically exclude one-time items.
The latest quarter's results include net charges of $439 million, compared with net charges of $504 million in the year-ago period.
Sales and other operating revenues for the quarter declined 8 percent to $54.30 billion from $58.90 billion in the year-ago period, mainly due to lower prices for crude oil.
Total revenues and other income decreased 6 percent to $56.82 billion from $60.71 billion in the same period last year. Analysts had a consensus revenue estimate of $67.73 billion.
U.S. upstream earnings for the quarter declined 26 percent to $1.13 billion, due mainly to lower crude oil and natural gas realizations and higher operating expenses.
Meanwhile, international upstream earnings rose 3 percent to $4.78 billion as lower crude oil production and realizations were partly offset by favorable tax items and lower exploration expenses.
U.S. downstream operations fell 71 percent from last year to $135 million. The decrease was due to higher operating expenses primarily as a result of a turnaround activity at the refineries in El Segundo, California, and Pascagoula, Mississippi, in addition to lower margins on refined product sales. The decrease was partly offset by higher earnings from the 50 percent-owned Chevron Phillips Chemical Company LLC.
International downstream operations earnings increased 64 percent to $566 million. Earnings were up primarily due to higher margins on refined product sales, but were partly offset by the absence of a 2012 gain on the sale of the company's fuels and finished lubricants businesses in Spain.
Chevron's board of directors approved an 11.1 percent increase in the quarterly dividend to $1.00 per share, payable in June 2013. The company purchased $1.25 billion of its common stock in the first quarter under its share repurchase program.
In Friday's regular session, CVX is trading at $118.94, up $0.43 or 0.36 percent on a volume of 29,596 shares.
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