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Chevron shares jump about 2% on strong earnings beat

A Chevron petroleum storage tank is seen at Port Everglades in Fort Lauderdale, Florida.
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A Chevron petroleum storage tank is seen at Port Everglades in Fort Lauderdale, Florida.

Chevron posted a strong earnings beat as the oil major continued to cut costs and benefited from higher oil prices.

Shares of the integrated oil company surged 1.9 percent after the market parsed initially unclear results as Chevron released EPS figures that were not comparable to last year's report.

"We benefitted [sic] from increasing crude oil prices and ongoing efficiencies being implemented across the company," Chairman and CEO John Watson said in a statement.

The San Ramon, California-based company earned $2.3 billion, or an adjusted $1.23 per share, in the first quarter of 2017, compared with Wall Street's expectations for profits of 86 cents a share.

That compared with a loss of $725 million, or 11 cents a share, in the year-ago period.

Revenues of $33.4 billion also topped analysts' expectations for $33.3 billion in sales.

Chevron's cash flow generated by its operations — a key metric in the oil and gas industry — was $3.9 billion, up from $1.1 billion a year ago.

The company reduced its capital and exploration spending by about $2 billion from the first quarter of 2016.

"Our operating expenses were reduced by about 14 percent from first quarter 2016 and our capital spending declined over 30 percent from a year ago," Watson said.

Chevron's upstream exploration and development business improved both in the United States and internationally, helped by higher crude prices. The international segment got a boost from Chevron's $600 million sale of its geothermal business in Indonesia.

Results from the refining and marketing operations were mixed. The U.S. downstream earnings nearly doubled to $469 million as profit margins expanded, while international earnings slipped slightly to $457 million amid lower margins on refined products and foreign exchange headwinds.

On Wednesday, Chevron announced a quarterly dividend of $1.08 a share, unchanged from the previous quarter.