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Chevron posted a 51 percent drop in quarterly profit Friday, the latest oil giant to be hit by the steep decline in oil and natural gas prices and the anemic margins for refineries.
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Chevron [CVX
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], the second-largest U.S. oil company behind Exxon Mobil [XOM
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], offset part of the drop in energy prices by increasing its oil output and cutting costs during the quarter, helping it beat analysts profit forecasts.
"This is the best set of results from Chevron for a long time, and we think the stock will react favorably, especially after (Exxon's) disappointing results from yesterday," Credit Suisse analysts said in a note to investors.
On Thursday, Exxon and Royal Dutch Shell [RDS
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] dashed hopes for an imminent turnaround for the oil industry, saying a sluggish economic recovery was weighing on energy demand and prices.
Third-quarter net profit at Chevron fell to $3.83 billion, or $1.92 per share, from $7.89 billion, or $3.85 per share, in the same quarter a year before.
Excluding $400 million gains from asset sales and other items, Chevron posted earnings per share of $1.72 and topped the $1.47 per share that analysts had forecast, according to Thomson Reuters I/B/E/S.
However, revenues fell 41 percent to $46.6 billion, slightly below the $47 billion analysts had forecast.
Chevron's shares were down 0.7 percent at $77.38 in early trade, in line with weakness in the sector as U.S. oil prices dipped.
Chevron's earnings from its oil production arm fell 41 percent as an increase in output helped reduce the impact from the drop in oil prices, which reached a record in the year-ago period.
Oil and gas output rose nearly 11 percent from a year earlier to 2.70 million oil-equivalent barrels per day, boosted by the start-up of its Blind Faith and Tahiti fields in the Gulf of Mexico and the Agbami field in Nigeria and an expansion at Tengiz in Kazakhstan.
Earnings from refineries fell nearly 90 percent to $194 million, and were particularly hard hit in the United States, where the company pulled in a modest $34 million in profits during the quarter.
Chevron shares are up 5 percent so far in 2009, compared with a 16 percent gain for the Chicago Board Options Exchange index of oil companies, as those without refineries have fared much better with oil and gas prices recovering.
U.S. oil prices averaged $68 per barrel in the third quarter, up from nearly $60 per barrel in the second quarter, but down from $118 in the same quarter a year ago.
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