Title: Chevron’s Q3 Profit Falls Short of Expectations, Shares Decrease
Subtitle: Lower Crude Prices and Increased Costs Impact Oil Giant’s Earnings
Chevron, one of the world’s largest oil companies, reported lower-than-expected profits for the third quarter of this year, causing a decrease in its share price. The company’s earnings declined compared to record levels last year due to lower crude prices and increased costs.
In the third quarter, Chevron earned $6.5 billion, or $3.48 per share, a significant drop from $11.2 billion, or $5.78 per share, in the same period last year. Adjusted profit, which excludes one-time items, was $3.05 per share, missing analysts’ estimate of $3.75 per share.
This disappointing performance immediately impacted the company’s stock value, with shares falling 2% in premarket trading to $151.14.
Chevron’s recent expansion efforts aimed at enhancing shale and deepwater oil production, including the acquisitions of U.S. Hess, PDC Energy, and a majority stake in ACES Delta, were not enough to offset the effects of declining oil prices and operational setbacks.
The company also highlighted maintenance issues and project delays in Kazakhstan as a significant factor impacting its results. These challenges further contributed to the decline in profit, as capital expenditures rose over 50% to $4.7 billion, partly due to the ACES Delta acquisition.
Profit from Chevron’s oil and gas operations fell approximately 38% to $5.76 billion, reflecting the challenging market conditions. However, the acquisition of PDC Energy positively impacted the company’s production volume, which rose to 3.15 million barrels of oil and gas per day (boed).
In addition to the decline in oil and gas earnings, Chevron’s refining business also faced challenges. The operating profit from refining decreased to $1.68 billion, down from $2.53 billion last year. This decline was attributed to weaker margins and the impact of overseas factors on input costs.
Chevron’s disappointing results and the overall downward trend in the oil industry further highlight the challenges faced by major energy companies. With volatile crude prices and increasing costs, industry players must focus on streamlining operations and finding innovative solutions to remain profitable.
Despite these setbacks, Chevron retains its position as one of the leading companies in the energy sector. As the industry evolves, Chevron will continue to adapt and explore new opportunities to drive growth and ensure its long-term success.