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Chevron Posts Loss Wider Than Had Been Expected

Chevron Corp posted a wider than expected loss that was almost double that of estimates of analysts amidst an collapse in the oil market that has sparked corporate bankruptcies, currency crises, layoffs in the hundreds of thousands and credit downgrades across the energy industry.

Chevron swung from a profit in the same period last year of $1.6 billion equal to $1.37 per share to a loss of more than $725 million equal to 39 cents per share, said the company based in San Ramon, California.

The financial results were worse than the loss of 19 cents projected by Wall Street. Sales fell by nearly one third to end the quarter at $23.6 billion.

The last time the third largest oil exporter in the world posted a loss during the first quarter was in 1992, when crude was trading at close to $18 per barrel,

CEO and Chairman John Watson has cut nearly 1 in 10 jobs, written off certain discoveries costing too much to bring to fruition and lowered targets for production as a shrinkage in cash flow prompted S&P and Moody’s Investors to cut the credit ratings of Chevron.

Shares at Chevron fell over 1.1% in New York trading during Friday midmorning and were at $101.35.

While the production at the company has seen little change from one year ago, the averages price per barrel of crude has plummeted. Brent Oil has fallen by 36% during the quarter compared to a year ago.

The worldwide output of Chevron was over 2.67 million barrels of oil equivalent per day, fractionally down from its 2.68 million for the same period one year ago.

Increases in production from ramp-ups in projects in Nigeria and the U.S. as well as other regions, helped to offset the shut in, in the area between Saudi Arabia and Kuwait as well as other field declines that were normal.

Despite this squeeze, Chevron this week has committed to paying investors $1.07 for each share owned, a dividend, which will cost the business close to $2 billion when checks are cut during June.

Spending for capital projects has been projected to range between $25 billion and $28 billion in 2016.

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