Chevron Returns to Profit as Oil Rebounds From Pandemic
April 30 2021 - 7:04AM
Dow Jones News
By Christopher M. Matthews
Chevron Corp. swung to a profit for the first time in a year as
the global energy industry starts to recover from the destruction
of oil and gas demand wrought by the pandemic.
The second-largest U.S. oil company behind Exxon Mobil Corp.
reported $1.4 billion in first-quarter profit, results that were
boosted by sharply improved oil prices as countries around the
world soften coronavirus restrictions.
Chevron's net income was down about 62% from the same quarter
last year, but a substantial increase from a $665 million loss in
the previous quarter.
"Earnings strengthened primarily due to higher oil prices as the
economy recovers," Chevron Chief Executive Mike Wirth said in a
statement.
Chevron's profits were lower than expected by analysts, who
predicted about $1.8 billion in net income, according to S&P
Global Market Intelligence. Chevron's refining and chemical units
reported $5 million in profits, down from $1.1 billion a year ago,
which Mr. Wirth attributed to the continuing impact of the pandemic
and the February winter storm in Texas, which shut down much of the
petrochemical complex along the Gulf of Mexico.
Chevron's results were also weighed down by $978 million in
expenses related to employee benefit and pension payments.
The results indicate Chevron is turning a corner following one
of its most challenging years ever. The San Ramon, Calif.-based
company reported $5.5 billion in losses in 2020. On Wednesday, it
increased its quarterly dividend by 4%, one of several major oil
companies to return more cash to investors this quarter as the
industry recovers.
U.S. oil prices neared a six-week high of about $65 a barrel
Thursday and are up nearly 80% over the past six months.
"Momentum across the energy complex remains quite strong,"
analysts at Ritterbusch & Associates said in a note to
investors.
Despite the improving conditions, Chevron has pledged to keep
capital expenditures austere. Mr. Wirth said capital spending
decreased 43% from last year during the quarter, citing its
corporate restructuring last year that saw as much as 15% of its
workforce laid off.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
April 30, 2021 06:49 ET (10:49 GMT)
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