Chevron Earnings as Predicted, but Still Disappointing

Chevron warned in early October that its earnings in the third quarter would be lower sequentially due to “significantly lower” downstream earnings. Refining margins did in fact get the blame today, with U.S. refining earnings down from $456 million in the year-ago quarter to $249 million. For the first nine months of 2013, downstream earnings are off by more than two-thirds.

U.S. upstream earnings fell $96 million year-over-year, from $1.12 billion to $1.03 billion, as higher realized prices for oil and natural gas were more than offset by higher depreciation, exploration and operating expenses.

Throughput at U.S. refineries rose by 52,000 barrels a day, and it fell by 24,000 barrels a day at international refineries. Sales of refined products rose by 12,000 barrels a day in the United States and were essentially flat internationally.

The company’s CEO said:

We continue to make good progress on our major capital projects. Construction continues, and important milestones are being reached, on our Gorgon and Wheatstone LNG projects in Australia. Important interim construction goals have been recently reached for our Jack/St. Malo and Big Foot deepwater projects in the Gulf of Mexico, in preparation for their project start-ups scheduled for late 2014. We are also moving forward on the development of our liquids-rich unconventional properties in the United States.

The earnings announcement did not include guidance, but the consensus estimate for the fourth quarter calls for EPS of $3.03 on revenues of $63.78 billion. For the full year, EPS and revenues are estimated at $11.76 and $234.85 billion, respectively.

Chevron shares were down about 0.6% in premarket trading, at $119.23 in a 52-week range of $100.66 to $127.83. Thomson Reuters had a consensus analyst price target of around $132.60 before this report.