Chevron and Exxon Earnings on Tap: Downstream Takes the Spotlight

Oil and gas supermajors Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) reported fourth-quarter and full-year 2012 results on Friday before the markets opened. Both companies beat bottom-line expectations but missed on the top-line, as production generally fell but downstream operations kicked into gear to provide an earnings boost.

Chevron reported fourth-quarter earnings of $7.2 billion, or $3.70 per diluted share, a 43.4 percent gain on the year-ago period and ahead of expectations for $3.04 per share. Sales and operating revenue for the quarter fell 3.4 percent to $56 billion, mainly due to lower crude oil volumes. For the quarter, earnings from upstream operations increased 19.5 percent to $6.8 billion. Downstream operations moved from a loss of $61 million in the fourth quarter of 2011 to gains of $925 million in the fourth quarter of 2012.

“We’ve now led the industry in earnings per barrel for over three years,” commented John Watson, chairman and CEO. “In the downstream business, we completed a multiyear plan to streamline the asset portfolio,” he added.

Shares were up modestly, about half a percent, on Friday morning following the report. Meanwhile, Exxon Mobil edged lower…