Chevron Braces for a Lackluster Third Quarter
Chevron (NYSE:CVX) released its interim update for the third quarter on Wednesday evening, and the news was not good. The company reported that third-quarter earnings are expected to decline relative to second-quarter earnings due primarily to reduced downstream earnings and headwinds in foreign currency exchange. Shares declined in aftermarket trading and continued to slide into Thursday despite a broad market rally.
Before the announcement, analysts were expecting Chevron to report adjusted earnings per share of about $3.05, a nearly 19 percent gain on the year. These earnings expectations were backed up by strong revenue growth of 8.9 percent on the year.
But while Chevron banked about $300 million in gains last quarter from foreign exchange, it is expecting to lose about that much in the third quarter, and margins in its refining division have been squeezed.