Chevron Reports Loss as Pandemic Continues to Hurt Demand
By Dave Sebastian
Chevron Corp. swung to a loss for the September quarter as the
Covid-19 pandemic continued to sap oil demand and crude prices
The San Ramon, Calif.-based oil company on Friday posted a
third-quarter loss of $207 million, or 12 cents a share, compared
with a profit of $2.58 billion, or $1.36 a share, in the comparable
quarter last year. The company reported a $8.27 billion loss for
the second quarter.
Adjusted earnings were 11 cents a share in the latest quarter.
Analysts polled by FactSet were expecting an adjusted loss of 26
cents a share.
Revenue fell 32.3% to $24.45 billion from the year-ago period.
Analysts were looking for $25.84 billion.
"Third quarter results were down from a year ago, primarily due
to lower commodity prices and margins resulting from the impact of
Covid-19," said Michael Wirth, Chevron's chairman and chief
executive. "The world's economy continues to operate below
pre-pandemic levels, impacting demand for our products which are
closely linked to economic activity."
World-wide oil-equivalent production declined 7% to 2.83 million
barrels a day during the quarter, Chevron said.
Downstream earnings, which represents much of the company's
operations after it pumps oil out of the ground, fell to $141
million from $389 million. U.S. upstream earnings dropped to $116
million from $727 million due to curtailed production and low
Chevron said earlier this year it would cut its spending by $4
billion, or 20%. It plans to lay off as much as 15% of its staff.
The sector's largest companies have also announced layoffs and cut
billions of dollars from capital budgets, with Exxon Mobil Corp. on
Thursday saying it expects to shed as much as 15% of its global
workforce over the next year.
Despite a modest economic recovery, oil-and-gas companies are
being hammered by a sustained drop in consumption of gasoline and
jet fuel as millions of people work from home and avoid driving and
flying during the pandemic. In Europe, new lockdowns in response to
climbing Covid-19 cases are damping hopes that the global economy
will regain its footing this year. Longer-term concerns also linger
about future competition from renewable energy and electric
vehicles to drag down the value of many oil-and-gas companies to
Nevertheless, Chevron has shown a willingness to spend despite
the market uncertainty. It entered the pandemic with a relatively
strong balance sheet and in July agreed to buy Noble Energy Inc.
for about $5 billion, the largest oil-patch tie-up since the
pandemic took hold.
Write to Dave Sebastian at email@example.com
(END) Dow Jones Newswires
October 30, 2020 07:32 ET (11:32 GMT)
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