Chevron profit slumps on weaker refining margins

Chevron Corp’s first-quarter profit fell 29% from the same period a year ago as gains from oil and gas prices were undercut by weaker refining margins, production losses and the impact of an asset sale that benefited results last year.

Oil companies are generally enjoying a recovery in energy prices, up at least a third this year, after the pandemic hammered demand at the start of 2020.

Chevron and its peers slashed spending, paving the way for several firms to post sharply better results.

But as European rivals topped forecasts, Chevron’s earnings declined on winter storm production losses, weaker margins and the absence of asset and tax items that benefited year-ago profit.

A U.S. winter storm that halted some output cost $300 million in lost production and repairs, said finance chief Pierre Breber.

Chevron, the second-largest U.S. oil producer, reported a profit of $1.72 billion, or 90 cents per share, compared with $2.45 billion, or $1.31 per share, a year earlier. Year-ago results included about $680 million in asset sales and favorable tax items.

Net profit was $1.4 billion, or 72 cents a share, down from $3.6 billion, or $1.93 cents a share, a year earlier.

Shares dipped 2.7% to $104 in premarket trading on Friday.

Chevron’s cash flow from operations, at $4.2 billion, was more than $1 billion below Wall Street estimates, according to Refinitiv IBES data. Its expenses for debt costs, employee pensions and benefits more than doubled to $978 million.

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