Chevron Corporation (NYSE:CVX) announced its first quarter earnings. The earnings slumped 43% in the period. Extensive refining activity, as it refines fuel into gasoline and diesel, and volatility in currency prices counterbalance the affects of declining crude oil prices as a result outperformed the analysts’ expectations.
Earnings from refining, marketing and chemical business or downstream unit spiked to $1.42 billion from $710 million. Exploration and production units, also called as upstream business, earnings slipped to $1.56 billion from $4.31 billion. The average sales price of oil and natural-gas liquids in upstream segment settled at $43 a barrel compared to $91 in a prior-year period.
Chevron reported fainted total earnings of $2.57 billion, or $1.37 a share, sliding down from a year earlier earnings of $4.51 billion, or $2.36 a share. But positive aspect for company is that currency instability added $580 million to firm’s earning account, compared to loss of $79 million a year ago.
The company also affected in revenue segment which tumbled 35% to $34.56 billion but still above the analysts’ revenue forecast of $24.37 billion, polled by Thomson Reuters.
Chevron, U.S largest oil company behind Exxon Mobil Corporation (NYSE:XOM), has been muscling up its efforts to increase its oil-and-gas production. But excess availability of oil in market has declined the oil prices in recent months, just as Chevron is gaining momentum.
Worldwide oil-equivalent supply in the first quarter grew from 2.59 million barrels a day year on year to 2.68 million barrels a day in the first quarter.
Exxon Mobil Corp, U.S largest oil company, also reported a steep decline in profit margin, although bested estimates of Wall Street analysts’.
Both companies have cut down their expenses after enduring big losses from collapsing in oil prices and Chevron also declared that it would stop buying back its shares.
Chief Executive on Friday said that the company is limiting its costs and pacing up its efforts on new project approvals. Chevron cash flow stood at $8.6 billion in the first quarter, below which the company spend in the same period of the earlier year i.e. $9.4 billion.
Chevron grabbed better profits due to its refining activity, refines fuel into gasoline and diesel, which proved advantageous for firm. The lower-price crude has assisted its refinery segment to increase its profits.