Chevron Corp. (NYSE: CVX) reported third-quarter 2014 results before markets opened Friday. The oil and gas supermajor posted diluted earnings per share (EPS) of $2.95 on revenues of $54.68 billion. In the same period a year ago, the company reported EPS of $2.57 on revenues of $58.5 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $2.55 and $52.97 billion in revenues.

Chevron’s downstream refining and marketing business posted earnings of $1.39 billion in the third quarter, compared with $380 million in the year-ago quarter. Upstream revenues fell from $5.09 billion in the year-ago quarter to $4.65 billion this year.

Currency exchange effects added $366 million to Chevron’s earnings in the quarter, compared with a decrease of $276 million a year ago. Stripping out the exchange effects, this year’s $5.59 billion profit drops to $5.227 billion and last year’s earnings rise to $5.226 billion.

Global oil-equivalent production fell from 2.59 million barrels a day in the 2013 third quarter to 2.57 million barrels a day due to normal field declines and asset sales. U.S. profits fell from $1.03 billion a year ago to $929 million due to lower crude oil prices and higher operating expenses. The company’s average U.S. selling price per barrel dropped by $10.00 a barrel to $87, while the average cost of natural gas rose from $3.23 per thousand cubic feet a year ago to $3.46 in the quarter.

U.S. refining profits rose from $249 million a year ago to $809 million in the first quarter due to higher margins on refined product sales, primarily reflecting higher production volumes in refining and higher marketing and trading margins. Internationally, refining profits rose from $131 million to $578 million, which Chevron attributed to a favorable change in effects on derivative instruments and higher margins on refined product sales.

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The company’s CEO said:

Despite a decline in crude oil prices, our third quarter earnings were higher than a year ago. Overall downstream results improved, reflecting the benefits of lower feedstock costs and better refinery reliability, particularly in the U.S. … Cash generation in the quarter was solid, and our financial strength enables us to both reward our investors through distributions and fund value-adding projects.

Chevron repurchased $1.25 billion in common stock during the third quarter and pays a $1.07 quarterly dividend (3.7% dividend yield). Cash flow from operations totaled $25 billion, up from $24.6 billion in the year-ago quarter.

Capital spending for the first nine months of 2014 totaled $29 billion, nearly equal to the prior year’s nine-month total of $28.9 billion.

The earnings announcement did not include guidance, but the consensus estimate for the fourth quarter calls for EPS of $2.30 on revenues of $50.39 billion. For the full year, EPS and revenues are estimated at $10.17 and $220.18 billion, respectively.

Pump prices for gasoline react more slowly to falling crude oil prices than to rising prices. Largely that is due to the last in-first out inventory accounting method that oil companies use. As the refiners buy less at the lower crude price, they process the more expensive crude already in storage. Like all things that can’t go on forever, this won’t either. As pump prices fall below $3 a gallon, refining margins will narrow.

Chevron’s shares were up about 1.2% in premarket trading, at $118.75 in a 52-week range of $106.65 to $135.10. Thomson Reuters had a consensus analyst price target of around $132.80 before the report.

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