Chevron Corp. said its first-quarter earnings dropped 43%, but strength in its refining segment and currency fluctuations helped offset tumbling crude oil prices, pushing the results above estimates.
Chevron, the second-biggest U.S. oil company in market value behind Exxon Mobil Corp., has been working to increase its oil-and-gas production. But oil prices have plummeted in recent months amid an oversupply, just as its drive begins to show results.
Global oil-equivalent production in the quarter rose to 2.68 million barrels a day, up from 2.59 million barrels a year ago.
The results come a day after Exxon also posted a sharp drop in profit, yet beat Wall Street estimates.
Both companies have moved to trim spending as the collapse in oil prices has wiped billions of dollars from their its cash flow, and Chevron has said it would stop buying back its shares.
Chief Executive John Watson added Friday that the company is reducing costs and pacing new project approvals. In the latest quarter, capital spending fell to $8.6 billion from $9.4 billion a year ago.
Chevron’s profits are better insulated than most oil producers because it also makes money from refining the fuel into gasoline and diesel. The lower-cost crude has helped its refinery businesses improve profit margins.
In the latest quarter, refining, marketing and chemical operations—or downstream—earnings rose to $1.42 billion from $710 million. The segment benefited from lower feedstock costs.
Meanwhile, earnings from exploration and production—known as the upstream segment—fell to $1.56 billion from $4.31 billion.
In its U.S. upstream segment, the average sales price for oil and natural-gas liquids was $43 a barrel, down from $91 a year ago.
In all, Chevron reported earnings of $2.57 billion, or $1.37 a share, down from $4.51 billion, or $2.36 a share, a year earlier. Currency fluctuations added $580 million to earnings, versus a year-earlier hit of $79 million.
Revenue fell 35% to $34.56 billion.
Analysts polled by Thomson Reuters had forecast earnings of 79 cents a share and revenue of $24.37 billion.
Shares edged up 0.4% to $111.55 premarket. The stock is down 1% this year through Thursday’s close,- reported http://www.wsj.com.
