ConocoPhillips' (COP) first-quarter earnings fell 3% as the company was hurt by lower production and weaker refining margins in the last quarter before its split into two publicly traded companies.
Shares were down 2.4% at $71.10 in recent premarket trading as the bottom line missed expectations.
Conoco is in the midst of a three-year effort to refocus its business that began in 2010 during which it has shed billions of dollars in assets, including its recent sale of its Vietnam business. Phillips 66, Conoco's refining arm, is set to become a stand-alone company May 1.
Phillips 66 will focus on growing its chemical and midstream segments at the expense of its fuel production business because of the weak outlook for fuel demand, the company's incoming Chairman and Chief Executive Greg Garland said recently. The company's chemical and midstream businesses are run as joint ventures with Chevron Corp. (CVX) and Spectra Energy Corp. (SE), respectively.
ConocoPhillips reported a profit of $2.9 billion, down from $3 billion a year earlier. On a per-share basis, earnings improved to $2.27 from $2.09. Excluding asset-sale gains, partly offset by repositioning costs and write-downs, earnings were up at $2.02 from $1.82.
Sales and other operating revenue decreased 0.7% to $56.1 billion. Analysts polled by Thomson Reuters most recently projected earnings of $2.08 on revenue of $53.6 billion.
The company reported average production of about 1.64 million barrels of oil equivalent a day, down 65,000 barrels a day, and slightly above expectations.
The exploration and production arm's adjusted operating earnings were down 3% as reduced volume and lower natural-gas prices were partly offset by higher prices for crude and liquefied natural gas.
The downstream business, which purchases crude to process into petroleum products such as gasoline and diesel, posted an adjusted earnings decline of 7.5% amid weaker refining margins.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com