The Rising Influence of Rising Affluence

[DewDiligence]

CVX 3Q10 Earnings Decline on Weak Dollar, Higher Drilling Costs

[CVX reports the actual 3Q10 numbers on Oct 29.]

http://online.wsj.com/article/SB10001424052748703440004575548550571336566.html

›OCTOBER 12, 2010, 6:45 P.M. ET
By JOHN KELL

Chevron Corp. said Tuesday it expects third-quarter earnings to slide from the previous quarter due to a weaker dollar, lower oil prices and higher expenses associated with the Gulf of Mexico deepwater-drilling ban.

It didn't provide an earnings forecast for the third quarter but said the weaker dollar would pare about $400 million from profit. The second-largest U.S. oil-and-gas company by market value after Exxon Mobil Corp. reported second-quarter profit of $5.41 billion, or $2.70 a share. Analysts currently estimate a profit of $2.28 a share, excluding special items, according to Thomson Reuters.

Compared to its rivals, Chevron's output is more heavily weighted toward crude oil [see table in #msg-52172028], which has been more profitable than natural gas due to a boom in U.S. natural gas production.

Earlier this month, Chevron said it plans to repurchase between $500 million and $1 billion of its own shares each quarter starting in the fourth quarter, a move that underscores the oil giant's optimism on oil prices.

On Tuesday, Chevron said U.S. production in the first two months of the quarter fell 7.1% from the year-ago quarter to about 692,000 barrels of oil equivalent a day [as expected from the GoM drilling ban]. International output jumped 4.3%.

During the first two months of the quarter, the company received $72.23 a barrel for crude oil from its U.S. fields, down 2.6% from the full second quarter but up 14% from a year earlier. U.S. natural-gas prices averaged $4.33 per thousand cubic feet, up 8% from the second quarter and 32% higher than the year-ago period.

For the third quarter, Chevron said its worldwide refining, marketing and chemical indicator margins were mixed.

Shares slid 1% to $82.81 in after-hours trading. The stock's movement has been uneven in recent months, but was still up 8.9% this year as of the close.‹