Chevron Warns of Fourth-Quarter Decline in Profits
Chevron Corp, the second-largest energy company in the US, lowered its forecast Thursday for fourth quarter earnings. While it is not expected to issue results for the period until January 27th, the company warned investors that profits would be "significantly below" third-quarter numbers, mainly due to lower profit margins. The company noted that its normally profitable refining and marketing business will likely break even for 2011's final three months, as it refined less oil both in the US and overseas and refining margins plummeted at Chevron operations on the US Gulf Coast.
Chevron did say it expects profits to be about the same in its exploration and production segment as higher prices for crude helped to offset the effects of slumping natural gas prices. The company also cited currency-exchange rates, which the company benefited from in the third quarter but expects to post a loss on in the fourth. Shares of the Dow component fell 2.6 percent on the downbeat forecast, falling below $105 a share.
In the third quarter, Chevron's profits more than doubled on a year-to-year basis due to near-record high oil prices during the summer. The company earned $7.83 billion in the period, or $3.92 a share, on revenue of $61.3 billion. Analysts had been expecting similar strong performance in 2011's final three months, as economists in a recent FactSet survey forecast earnings of $3.27 a share on revenue of nearly $80 billion.
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