Chevron Shares Tumble After-Hours on Profit Warning
Shares of Dow component Chevron (NYSE: CVX), the second-largest U.S. oil company, were down more than two percent in Tuesday's after-hours session after the company said that earnings for the third quarter 2012 are expected to be substantially lower than second quarter 2012.
Upstream results are projected to be lower between sequential quarters, reflecting foreign exchange losses and lower liftings and realizations, partially offset by an asset sale gain. Downstream earnings in the third quarter are expected to be significantly lower than second quarter 2012, reflecting the impact of negative timing effects, lower realized margins and the negative effects of several smaller unrelated items, the company said in a statement.
For the third quarter through the end of August, Chevron said U.S. upstream production fell by 19,000 barrels per day. The company said global upstream production slipped by 87,000 barrels per day.
Planned maintenance in Kazakhstan and the United Kingdom caused the majority of the decline. The company expects increased production in the fourth quarter 2012 compared to the third quarter 2012, reflecting the completion of planned turnarounds and restoration of shut-in production in the Gulf of Mexico, the company said in the statement.
The average selling price of U.S. natural gas rose 50 cents to $2.67 per thousand cubic feet, but the average price of crude sold by Chevron fell by $8.47 to $95.44 per barrel. Chevron said its third-quarter refining margins surged overall, but "U.S. marketing margins decreased sharply over the same period, particularly for the U.S. West Coast."
International downstream earnings are expected to be down due smaller gains on asset transactions and portfolio restructuring in Australia. California-based Chevron reports third-quarter results on November 2. Exxon Mobil (NYSE: XOM) is the largest U.S. oil company.
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