Chevron posts record earnings


Reuters
First Posted 08:25:00 08/02/2008

NEW YORK — Chevron Corp. said on Friday record oil prices drove second-quarter earnings up 11 percent to its highest-ever profit, but weak margins from gasoline production led to a big loss at its refining operations.

US oil prices averaged slightly less than $125 a barrel in the quarter, nearly double prices from a year earlier. But gasoline prices only rose 25 percent during that same period, resulting in weak profit margins for the fuel.

Chevron, the second largest US oil company, said net income rose to $5.98 billion, or $2.90 a share, from $5.38 billion, or $2.52 a share, last year.

Analysts, on average, expected the company to earn around $3.02 a share, according to Reuters Estimates.

Exxon Mobil Corp., the top US oil company, posted the highest-ever quarterly profit by a US company on Thursday, bringing in nearly $11.7 billion, but still disappointed investors with weak production.

“Clearly three-percent lower [gasoline] demand is going to have an effect on downstream numbers at least until we see a real meaningful correction in the feedstock costs,” said Lewis Ropp, who helps manage around $60 billion at Barrow, Hanley, Mewhinney & Strauss.

Still, Ropp said Chevron’s profit was impressive due to the high oil and natural gas prices.

“The commodity price just overwhelms any weakness in any other areas,” he said.
Earnings from the company’s chemicals unit dropped more than 60 percent to $41 million.

Chevron shares rose 25 cents at $84.81 in morning trading on the New York Stock Exchange on Friday. At its Thursday closing price, the stock was down about 9.4 percent this year, underperforming the Chicago Board Options Exchange’s oil index, off about 7.8 percent over the same period.(PDI)

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