Chevron Corp. (NYSE: CVX) reported quarterly profits that topped Wall Street expectations, as lower expenses offset a drop in earnings in its main business lines from a year ago.
Shares of the Company were up nearly 4% at USD 118.56 on Friday.
Chevron’s profit for the final quarter of 2018 jumped nearly 20%, to USD 3.73 Billion, or USD 1.95 per share. Analysts had been expecting earnings of USD 1.87 per share, according to Refinitiv.
The earnings beat was largely attributable to lower charges in the quarter due to tax impacts. Chevron faced just USD 419 Million in charges last quarter, compared with USD 3.46 Billion a year ago.
The California-based oil corporation generated USD 42.35 Billion in revenue, compared with the USD 46.13 Billion forecast by Wall Street.
Profits in Chevron’s upstream business producing oil and natural gas fell nearly 38% from the year ago to USD 3.29 Billion, also due to U.S. tax impacts.
Chevron’s production of oil and natural gas increased 12%, to 3.1 million barrels per day of oil equivalent in the quarter, bolstered by new liquified natural gas output from its Wheatstone project in Australia and surging output from its wells in the Permian Basin.
For the full year, Chevron reported record production at 2.93 billion barrels per day of oil equivalent.
Last month, the Company announced plans to spend USD 20 Billion on development and exploration for 2019. The budget is focused on short-cycle projects, most of which are projected to generate cash within two years.
Earnings fell by a third to USD 859 Million in Chevron’s downstream unit, which focuses on selling and refining fuels like gasoline. Profits from international refining operations rose seven-fold to USD 603 Million due to better margins and currency factors. That offset tax impacts that dragged on U.S. downstream earnings.
On Wednesday, Chevron announced it would buy Pasadena Refining System from Brazil’s Petrobras for USD 350 Million. The deal will give Chevron control of a Pasadena, Texas, refinery, its first processing facility in the Houston area and means of processing its growing Permian output.