Chevron Corp. said today first-quarter profit fell 64 percent as it, along with competitors, was stung by lower oil and natural gas prices.
The second-largest U.S. oil company capped off a bleak couple of weeks of earnings reports for major oil and gas producers. For Chevron, it marked the lowest quarterly earnings since the final three months of 2003. After several years of rising prices and robust profits, the industry is trying to adjust to vastly different market conditions. In the ongoing recession, people simply aren’t using as much energy. Chevron said its net income for the first three months of 2009 amounted to $1.84 billion, or 92 cents per share. That compared with $5.17 billion, or $2.48 per share, in the quarter a year ago. The most-recent result included gains of about $400 million, or 20 cents per share, for the sale of assets. Thomson Reuters says analysts it surveyed expected earnings of 81 cents per share. Those estimates typically exclude one-time items. San Ramon, Calif.-based Chevron said total revenue fell 45 percent to $36.1 billion from $65.9 billion in last year’s first quarter. The biggest difference from a year ago is the price of oil, which spent most of 2008 at triple-digit levels and contributed to enormous profits before collapsing. A barrel of crude was trading today at around $50 on the New York Mercantile Exchange. Natural gas prices have fallen sharply as consumers scale back consumption and inventories grow. Chevron said income from its exploration and production operations tumbled 75 percent in the quarter to $1.27 billion, dragged down by lower prices. The company was particularly hard hit in the U.S., where earnings plummeted from $1.6 billion a year ago to $21 million in the first three months of 2009. The reason was simple: Chevron’s average sales prices per barrel of crude oil and natural gas liquids fell nearly 60 percent from a year ago to $36. Comparable natural gas prices fell 45 percent. On a positive note, Chevron said worldwide production rose about 2 percent from a year ago, in part from last year’s startup of deepwater projects in Nigeria and the U.S. Gulf of Mexico. The company also reported better results from its business that makes and sells gasoline and other refined products. Excluding gains from the sale of marketing businesses in Nigeria and Brazil, Chevron’s earnings at its refining, marketing and transportation arm rose 68 percent to $423 million, as refining margins improved from depressed levels a year ago because of lower crude prices. Chevron shares rose 27 cents to $66.37