Chevron profit pinched by cheaper oil, but beats estimates

Fri Apr 26, 2013 12:42pm EDT
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By Braden Reddall

(Reuters) - Lower oil prices bit into Chevron Corp's CVX.N quarterly profit as did refinery downtime and higher operating costs in its home market, but the oil company's shares rose as the earnings topped expectations.

Analysts cited foreign currency gains that gave the company a particular boost in the quarter.

Chevron also announced this week an 11 percent increase in its dividend, making use of some of the $19 billion in cash accumulated to shoulder a near-$37 billion annual capital spending program, which has been inflated by natural gas projects in Australia.

"Chevron has significant financial flexibility to increase shareholders distribution, despite higher spending levels," Oppenhemier analyst Fadel Gheit said in a note.

First-quarter net income fell 4.5 percent to $6.18 billion, or $3.18 per share, from $6.47 billion, or $3.27 per share, a year earlier. Analysts, on average, expected $3.08 per share, according to Thomson Reuters I/B/E/S.

The company produced 2.65 million barrels of oil equivalent per day, up from 2.63 million bpd a year earlier, though down from a particularly strong 2.67 million in the fourth quarter.

Achieving increased production from oil wells has been a struggle for Chevron and larger rival Exxon Mobil Corp XOM.N, which reported a drop in first-quarter production on Thursday.

Chevron is targeting 25 percent growth in output by 2017, and its much-delayed liquefied natural gas plant in Angola is a key new project this year. Chief Financial Officer Pat Yarrington said it would start up this quarter, and reach full capacity by year-end - contributing about 20,000 bpd for 2013.   Continued...

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013. REUTERS/Mike Blake