Chevron's 3Q profit soars on oil prices

Chevron Corp. said Friday its third-quarter profit more than doubled on the back of record crude prices this summer, though worldwide production fell during the period.

Chevron, the second-largest U.S. oil company, capped off a continued string of robust quarterly profit reports from the world's major oil companies, including another U.S. corporate profit record for No. 1 Exxon Mobil Corp.

Altogether, Chevron, Exxon Mobil and rivals BP PLC, Royal Dutch Shell PLC and ConocoPhillips posted earnings of $44.4 billion for the July-September period, up 58 percent from the same time a year ago.

But this period of astounding, sometimes record profits may be coming to an end.

Crude prices peaked at $147 near the start of the quarter in mid-July before embarking on a dramatic slide that has continued into the fourth quarter. When the third quarter ended Sept. 30, benchmark crude prices were still around $100 a barrel. In early trading Friday, they slipped below $64 a barrel.

San Ramon, Calif.-based Chevron said it earned $7.89 billion, or $3.85 a share, in the three months ended Sept. 30, versus $3.72 billion, or $1.75 per share, at the same time last year.

Analysts were expecting average earnings of $3.25 per share based on a survey by Thomson Reuters.

Revenue shot up 43 percent to $78.87 billion from $55.2 billion.

"Our disciplined capital spending and tight control over costs remain extremely important in today's uncertain economic climate," said Chevron chairman and chief executive Dave O'Reilly. "Our strong balance sheet enables Chevron to continue investing in attractive projects that increase the production of oil and gas and improve the efficiency of our refinery network."

Its shares slipped 10 cents to $74.08 in morning trading Friday.

Chevron said earnings from its exploration and production, or upstream, business rose about 80 percent in the quarter to $6.18 billion, buoyed by crude prices.

However, global production fell nearly 6 percent to an average of 2.44 million barrels of oil equivalent a day, hurt in part from late-summer hurricanes that shut down output in the Gulf of Mexico.

At its U.S. upstream arm, Chevron said the average sales price for a barrel of crude and natural gas liquids was $107 in the third quarter, up from $67 a year ago.

Chevron said it swung to a profit of $1 billion at its U.S. refining and marketing arm after posting a loss of $110 million a year ago, when ample gasoline supplies made it difficult for Chevron and other refiners to recover higher oil costs at the gasoline pump.

During this year's third quarter, Chevron said it benefited from significantly higher margins on the sale or refined products -- largely because of the dramatic drop in crude prices.

The company made the turnaround even though branded gasoline sales volumes fell 7 percent from a year ago.

Chevron reported capital and exploratory expenditures of $5.5 billion in the quarter, up from $5.2 billion a year ago. It also bought back $2 billion shares of its common stock.