Integrated oil company Chevron Corp. (CVX) on Friday reported a 51% slide in profit for the third quarter, reflecting sharp declines in earnings from both upstream and downstream businesses. Lower prices for crude oil and natural gas affected the upstream business, while the downstream business was hurt by weak margins on the sale of gasoline and other refined products. The company, however, reported an 11% increase in net oil-equivalent production during the quarter compared to a year ago.
With the economic crisis curtailing demand for oil, companies operating in the oil sector have had a tough time. Lower commodity prices and a decline in margins have hurt the bottom line of many of them. Oil prices have almost halved from an all-time high of $147 per barrel in July 2008, although they have improved from a yearly low of less than $34 a barrel in February this year. In early October, Chevron said that it expects earnings for the third quarter to be higher than the previous quarter, helped by higher prices for crude oil and gains from asset sales.
Chevron, the second largest U.S. oil company by market capitalization after Exxon Mobil Corp. (XOM), is engaged in every aspect of the oil and gas industry; including exploration and production, refining, marketing and transport, chemicals manufacturing and sales; and power generation.
Third-Quarter Results
Net income attributable to Chevron for the third quarter was $3.83 billion, or $1.92 per share, down from $7.89 billion, or $3.85 per share, in the same period last year.
The results for the latest quarter include gains of about $400 million from asset sales and tax items. Meanwhile, foreign-currency effects reduced earnings in the quarter by $170 million, compared with a benefit to income of $303 million a year earlier.
On average, fourteen analysts polled by Thomson Reuters expected the company to report earnings of $1.47 per share for the quarter. Analysts' estimates typically exclude special items.
The San Ramon, California-based company's profit for the latest quarter increased on a sequential basis. The company had reported net income of $1.75 billion, or $0.87 per share, for the preceding second quarter. Chevron also reported quarterly total revenues and other income of $46.63 billion, down 41% from $78.87 billion in the prior-year quarter, but up from $40.21 billion reported in the preceding second quarter. Analysts had a consensus revenue estimate of $47.84 billion for the latest quarter.
The company attributed the revenue decline to lower prices for crude oil, natural gas and refined products.
Sales and other operating revenues for the latest quarter were $45.18 billion, down from $76.19 billion in the same period last year.
Dave O'Reilly, Chairman and CEO of Chevron, said, "Our net oil-equivalent production this quarter was nearly 11 percent higher than the same quarter a year ago. This operational success helped mitigate a decline in earnings that was driven by sharply lower prices for crude oil and natural gas."
Chevron's worldwide capital and exploratory expenditures during the third quarter was $4.60 billion, down from $5.49 billion in the year-ago period.
Peer Performance
Exxon Mobil Corp. on Thursday said third-quarter net income attributable to the company plunged to $4.73 billion, or $0.98 per share, from $14.83 billion, or $2.85 per share, in the same quarter last year. Total revenues and other income for the third quarter plunged to $82.26 billion from $137.74 billion in the prior year quarter.
Royal Dutch Shell Plc (RDS-A, RDS-B,RDSA.L, RDSB.L) on Thursday reported a sharp fall in its third-quarter profit, mainly due to significantly lower oil and gas prices. Income attributable to shareholders for the third quarter fell to $3.25 billion from last year's $8.45 billion. On a per share basis, earnings dropped 61% to $0.53 from $1.37 a year ago. Quarterly revenues were $75.01 billion, down from $131.57 billion a year ago.
Segmental Results
Upstream - Exploration and Production
The segment's earnings for the third quarter totaled $3.64 billion, down 41% from $6.18 billion in the year-ago period. Earnings, however, rose from $1.52 billion in the second quarter due to higher prices for crude oil and gains of about $400 million related to asset sales and tax items. Also, the U.S. dollar weakened less in the third quarter against most major currencies than in the second quarter.
Chevron's worldwide oil-equivalent production during the third quarter was 2.70 million barrels per day, up nearly 11% from 2.44 million barrels per day a year ago. The company said that the increase was driven primarily by project start-ups since last year's third quarter.
U.S. upstream earnings for the quarter plunged to $878 million from $2.19 billion a year ago, hurt by lower prices for crude oil and natural gas, lower gains on asset sales and higher depreciation expenses.
Chevron's average sales price per barrel of crude oil and natural gas liquids was approximately $60 in the quarter, down from $107 in the same period last year. Average sales price of natural gas was $3.28 per thousand cubic feet, down from $8.64 in last year's third quarter.
Net oil-equivalent production in the third quarter was 745,000 barrels per day, up 15% from a year ago. The net liquids component of production rose 24% to 509,000 barrels per day. Net natural-gas production was 1.42 billion cubic feet per day, down about 1% year-over-year.
International upstream earnings for the third quarter fell to $2.76 billion from $4.00 billion in the same quarter last year, primarily due to the impact of lower prices for crude oil and natural gas. This was partially offset by an increase in sales volumes of crude oil and about $400 million of gains from asset sales and tax items related to the Gorgon project in Australia. Foreign-currency effects decreased earnings by $81 million in the latest quarter, compared with an increase of $316 million in last year's third quarter.
International Upstream's net oil-equivalent production increased 9% from the year-ago period to 1.96 million barrels per day. The net liquids component of production increased about 15% from a year ago to 1.38 million barrels per day, while net natural-gas production declined about 4% to 3.48 billion cubic feet per day.
Average sales price per barrel of crude oil and natural gas liquids in the third quarter was $62, compared with $103 a year earlier. Price of natural gas averaged at $3.92 per thousand cubic feet, down from $5.37 in the year-ago quarter.
Downstream - Refining, Marketing and Transportation,
The downstream segment posted earnings of $194 million in the third quarter, down 89% from $1.83 billion in the prior-year quarter, as the segment continued to experience weak margins on the sale of gasoline and other refined products. The company noted that weak demand and plentiful supply affected all its major markets. The segment's earnings, however, increased from $161 million in the second quarter.
U.S. downstream operations' earnings for the quarter were $34 million, compared with earnings of $1.01 billion a year earlier. Refinery crude-input was 879,000 barrels per day in the third quarter, down 43,000 barrels per day from the year-ago period, primarily due to the effects of a planned shutdown at the refinery in Richmond, California. Refined-product sales volumes was essentially flat with the year-ago period at 1.42 million barrels per day.
International downstream operations reported earnings of $160 million in the third quarter, down from $817 million a year earlier due to narrower margins on the sale of gasoline and other refined products. Foreign-currency effects reduced earnings by $97 million in the latest quarter, compared with a $63 million benefit a year ago.
On a sequential basis, earnings at International downstream operations declined from $256 million in the second quarter due to the absence of gains from the sales of marketing businesses in Kenya and Cameroon that were recorded in the second quarter, and on unfavorable tax effects.
Chemicals
The segment's earnings for the quarter rose to $164 million from $70 million a year ago and from $108 million in the second quarter. The sequential improvement in earnings was due to improved margins and sales volumes across several product lines. Earnings of the 50% owned Chevron Phillips Chemical Company LLC, or CPChem, and Chevron's Oronite subsidiary were both higher during the latest quarter.
Year-To-Date Results For the nine months of 2009, Chevron's net income attributable to the company was $7.41 billion, or $3.71 per share, down from $19.04 billion, or $9.23 per share, a year ago.
Revenues and other income for the nine-month period slumped to $122.96 billion from $227.80 billion in the prior-year period.
Sales and other operating revenues for the period dropped to $119.81 billion from $221.81 billion in the previous-year period.
Chevron's capital and exploratory expenditures in the first nine months of 2009 were $16.01 billion, up from $15.78 billion in the corresponding period of the prior year. The amounts included approximately $900 million in 2009 and $1.6 billion in 2008 for the company's share of expenditures by affiliates, which did not require cash outlays by the company.
Other Developments
Among other events during the third quarter, Chevron last month appointed Vice Chairman John Watson as Chairman and Chief Executive Officer, effective December 31, 2009. He succeeds David O'Reilly, who retires from the company and its board after a 41-year career, including a decade at the helm.
Chevron has been involved in a protracted environmental litigation in Ecuador. Last month, the company filed an international arbitration claim against the government of Ecuador citing violations of Eucador's obligations under the United States-Ecuador Bilateral Investment Treaty, investment agreements, and international law.
Stock Quotes
In Friday's regular trading session, CVX is trading at $77.03, down $0.92 or 1.18% on a volume of 4.94 million shares. In the past 52 weeks, the stock has been trading in a range of $56.12-$81.92.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.