Chevron Swings to a Loss -- Update
July 29 2016 - 10:56AM
Dow Jones News
By Anne Steele
Chevron Corp. swung to a loss in the latest quarter -- its third
straight period in the red -- as depressed prices continued to drag
results, though the company's revenue decline was less than
anticipated.
Shares in the second-largest energy company in the U.S. by
revenue fell 0.9% to $100.85 in morning trading in New York.
Chief Executive John Watson said results reflected lower oil
prices and "our ongoing adjustment to a lower-oil-price world." In
the second quarter, the company's average sales price per barrel of
crude oil and natural gas liquids was $36, down from $50 a year
ago.
Like many of its peers, the San Ramon, Calif.-based oil company
has looked to cut costs as sharply lower energy prices cut into
profitability. Chevron has said it would cut about 8,000 jobs -- up
to 12% of its workforce -- and slash billions of dollars from its
capital-spending budget to deal with market conditions. On Friday,
Mr. Watson said Chevron cut its operating expenses and capital
spending by more than $6 billion from the first six months of
2015.
In all for the June quarter, Chevron reported a loss of $1.47
billion, or 78 cents a share, compared with a profit of $571
million, or 30 cents a share, a year earlier. The quarter was
dented $2.8 billion by impairments and other noncash charges.
Revenue slid 27% to $29.28 billion. Analysts had projected
earnings of 32 cents a share on $28.54 billion in revenue.
Profit in Chevron's downstream, or refining, operations plunged
57% to $1.28 billion in the latest quarter.
Upstream operations, which include exploration and drilling,
meanwhile, were hit even worse by the plunge in energy prices. In
the U.S., the segment's loss deepened to $2.46 billion from $2.22
billion a year ago. Mr. Watson said the upstream business recorded
impairment and other charges on certain assets where revenue from
expected oil and gas production is expected to be insufficient to
recover costs.
Also Friday, rival Exxon Mobil Corp., the largest U.S. oil
company, said its quarterly profit dropped 60%, again plumbing a
new low since the 1999 merger of Exxon and Mobil, as the oil giant
also remains racked by low energy prices.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 29, 2016 10:41 ET (14:41 GMT)
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