Chevron Posts Lower Q4 2011 Profit
Global oil giant Chevron Corp. (NYSE:CVX) hinted this week of a leaner profit despite better production achieved in the initial months of the fourth quarter last year.
According to the oil firm’s quarterly update, overall profit for the fourth quarter would fall short when compared to the performance seen in the previous period. Analysts have forecasted Chevron to net $6.6 billion by the end of the year, or $3.33 per share.
With no definite figures being floated, market watchers assumed that Chevron’s fourth quarter results, which will be released January 27, would exceed that of the $5.3 billion profit guidance set in 2010.
Most likely though, the company’s latest profit would not surpass the $6.2 billion achieved in the third quarter last year, judging on Chevron’s new statement.
Chevron attributed the expected shortfalls to foreign exchange adjustments, which the company conceded would impact its upstream earnings.
“Full third quarter earnings included foreign exchange gains of nearly $450 million, compared to a loss anticipated in the fourth quarter,” Chevron said in a statement.
Chevron saw its oil production reaching 2.64 million barrel per day (bpd) in the fourth quarter, exceeding its third quarter output of 2.60 million bpd but running short of the 2.73 million bpd that the company set as its full-year forecast for 2011.
The oil giant blamed significant production cuts that attended its U.S. and some international facilities, rendering its downstream margins to fortunately reach a breakeven level.
The lower fourth quarter profit will not be bolstered by the sale of its UK refineries in the latter part of 2011, which cashed in for Chevron some inflow of $500 million.
Also, Chevron anticipates end-of-the-year net charges that could easily strip some $350 million from the company, at the maximum.
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