Chevron’s 4Q: Don’t Panic, Next Year Will Be Better

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To its credit, at least Chevron (NYSE:CVX) tried to take the bite out of its year-end results ahead of time. The oil and gas super major, the eleventh largest company in the world, reported in an interim update at the beginning of January telling investors that net liquids production fell in the fourth-quarter, and along with it, that earnings likely suffered.

On Friday, Chevron followed through, reporting fourth-quarter and full-year results that were pretty much exactly as bad as analysts expected. Fourth-quarter earnings fell 32 percent on the year to $4.9 billion, or $2.57 per diluted share, matching the mean analyst estimate — full-year earnings fell 18 percent to $21.4 billion, or $11.09 per diluted share, below the mean analyst estimate of $11.21 per share. Fourth-quarter sales and other operating revenues fell 3.6 percent to $54 billion — full-year revenues fell 4.5 percent to $220.16 billion, both lighter than the mean analyst estimate.

“Global crude oil prices and refining margins were generally lower in 2013 than 2012,” commented Chair and CEO John Watson in the earnings report. “These conditions, as well as lower gains on asset sales and higher expenses, resulted in lower earnings.” Chevron reported an average U.S. sale price per barrel of crude oil and natural gas liquids of $90 in the fourth-quarter, down from $91 in the year-ago period — in the international market, a barrel of crude oil and natural gas liquids fetched $101, up from $100 in the year-ago period.

U.S. net oil-equivellant production fell 4 percent on the year to 650,000 barrels per day as production in the Marcellus Shale and Delaware Basin failed to totally offset “normal field declines” elsewhere. International net oil-equivellant production fell 3 percent to 1.93 million bpd, also due to normal field declines that outpaced production ramp-ups.

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