Bloomberg News

Chevron’s Fourth-Quarter Profit Squeezed by Refinery Repairs

January 12, 2012

(Updates with stock decline in first, fourth paragraphs, crude-processing rates in third paragraph.)

Jan. 11 (Bloomberg) -- Chevron Corp., the second-largest U.S. energy company, said fourth-quarter profit was “significantly below” third-quarter results after maintenance work at a California refinery and the sale of a U.K. plant curbed fuel output. The shares fell more than 2 percent.

Profit from the company’s oil and natural-gas wells was comparable with third-quarter performance, the San Ramon, California-based company said in a statement today. Chevron’s refining business was “near break even,” according to the statement.

The company’s U.S. refineries processed 18 percent less crude during October and November than during the final three months of 2010 because of maintenance work that idled part of a California refinery, Chevron said. Processing rates at overseas plants slumped 24 percent during the same period after the August sale of a Welsh refinery to Valero Energy Corp.

Chevron dropped $2.22, or 2.1 percent, to $105.55 at 5:23 p.m. after the close of trading on the New York Stock Exchange. Before today, the stock had gained 21 percent in the past year. Chevron rose 17 percent in 2011, the second-largest increase in the NYSE Arca Oil index after Houston-based Marathon Oil Corp., which advanced 30 percent.

Assets Sold

Chief Executive Officer John Watson has been selling refining and retail-fuel assets in Europe and Africa to concentrate on higher-profit oil production and gas liquefaction projects. Chevron is scheduled to release full fourth-quarter results on Jan. 27.

The company’s wells pumped the equivalent of 2.64 million barrels of crude a day on average during the first two months of the fourth quarter, a 5.3 percent decline from the full fourth quarter of 2010.

Prior to today’s announcement, Chevron was expected to report per-share profit of $3.27 for the fourth quarter, based on the average estimate of 18 analysts in a Bloomberg survey. That would be a 24 percent increase from $2.64 a year-earlier. The company has 21 buy recommendations from analysts, five holds and one sell rating.

--Editors: Charles Siler, Susan Warren

-0- Jan/11/2012 22:24 GMT

-0- Jan/11/2012 22:37 GMT

To contact the reporter on this story: Joe Carroll in Chicago at

To contact the editor responsible for this story: Susan Warren at -0- Jan/11/2012 22:14 GMT

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