Chevron Swings to a Loss -- Update

By Anne Steele 

Chevron Corp. swung to a loss in the latest quarter -- its third straight period in the red -- as depressed prices continued to drag results, though the company's revenue decline was less than anticipated.

Shares in the second-largest energy company in the U.S. by revenue fell 0.9% to $100.85 in morning trading in New York.

Chief Executive John Watson said results reflected lower oil prices and "our ongoing adjustment to a lower-oil-price world." In the second quarter, the company's average sales price per barrel of crude oil and natural gas liquids was $36, down from $50 a year ago.

Like many of its peers, the San Ramon, Calif.-based oil company has looked to cut costs as sharply lower energy prices cut into profitability. Chevron has said it would cut about 8,000 jobs -- up to 12% of its workforce -- and slash billions of dollars from its capital-spending budget to deal with market conditions. On Friday, Mr. Watson said Chevron cut its operating expenses and capital spending by more than $6 billion from the first six months of 2015.

In all for the June quarter, Chevron reported a loss of $1.47 billion, or 78 cents a share, compared with a profit of $571 million, or 30 cents a share, a year earlier. The quarter was dented $2.8 billion by impairments and other noncash charges.

Revenue slid 27% to $29.28 billion. Analysts had projected earnings of 32 cents a share on $28.54 billion in revenue.

Profit in Chevron's downstream, or refining, operations plunged 57% to $1.28 billion in the latest quarter.

Upstream operations, which include exploration and drilling, meanwhile, were hit even worse by the plunge in energy prices. In the U.S., the segment's loss deepened to $2.46 billion from $2.22 billion a year ago. Mr. Watson said the upstream business recorded impairment and other charges on certain assets where revenue from expected oil and gas production is expected to be insufficient to recover costs.

Also Friday, rival Exxon Mobil Corp., the largest U.S. oil company, said its quarterly profit dropped 60%, again plumbing a new low since the 1999 merger of Exxon and Mobil, as the oil giant also remains racked by low energy prices.

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(END) Dow Jones Newswires

July 29, 2016 10:41 ET (14:41 GMT)

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