San Ramon, California-based Chevron Corp. (CVX) cautioned investors on Monday that earnings for the fourth quarter are expected to be lower than reported in the third quarter, driven by declining profits from its refining and marketing business.
The company also stated in an interim update that earnings at its exploration-and-production segment are expected to be flat, compared with the third quarter, despite higher commodity prices. Chevron cited the absence of gains during the third quarter associated with formal approval of the Gorgon project in Australia.
The company’s international oil equivalent production rose 2.9 percent to 2,014 Million Barrels Oil Equivalent per Day (MBOED) during the first two months of Q4 from 1,957 MBOED for Q3.
Chevron is the second-largest U.S. integrated oil company by market capitalization after Exxon Mobil (XOM).
Yesterday, Citigroup upgraded shares of Chevron Mobil from Hold to Buy, citing their forecast for higher oil prices in 2010. Citigroup analysts have set a price target of $97 a share as long as production levels and growth remain on track.
Citigroup hiked its long-term outlook for crude oil to from $65 to $80 a barrel.
For 2010, Citigroup analysts expect oil prices to average $76 a barrel, as compared to a prior forecast of $65. Citigroup also upped its ratings to Buy from Hold on BP (BP) and Petrobras (PBR).
Consensus earnings per share for the fourth quarter of 2009 are $1.77 per share. The low estimate is $1.64. The high estimate is $1.97. These are likely to change based on yesterday's guidance by Chevron.
Chevron will hold its quarterly earnings conference call on Friday, January 29, 2010 at 11:00 a.m. EST (8:00 a.m. PST).
On Monday, Chevron closed at $80.88, up $1.41 or 1.77 percent, on volume of 11.9 million shares on the NYSE.
Chevron is trading at $79.54, down $1.34 or 1.66 percent, in the pre-market this morning.
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