By Jennifer Hiller
HOUSTON (Reuters) - Chevron Corp (NYSE:CVX) reported a 36% drop in third-quarter profit on Friday, hit by lower oil and gas prices and refining margins, and warned higher costs would affect results in its current quarter, sending shares lower.
Results mirrored weaker earnings at BP (LON:BP) Plc and Royal Dutch Shell (LON:RDSa), which indicated they might delay dividend increases or a buyback program due to low prices. Exxon Mobil (NYSE:XOM) earlier on Friday reported its profits fell by nearly half from a year ago, citing lower oil and gas prices.
"Lower crude oil and natural gas prices more than offset" production increases, Chevron Chief Executive Mike Wirth said in a statement.
Chevron's profit fell to $2.58 billion, or $1.36 per share, in the quarter, from $4.05 billion, or $2.11 per share, a year earlier. Excluding one-time charges and foreign currency gains, the company said it earned $1.55 per share, exceeding the $1.45 per share expected by analysts, according to Refinitiv IBES.
"This was a solid quarter for the company," said Jennifer Rowland, an analyst with Edward Jones, with cash from operations exceeding spending on major projects and shareholder dividends. "We expect robust cash returns to shareholders to continue, she added.
However, the company offered a tepid outlook for the fourth quarter, saying it expected full-year oil and gas production to fall in the middle of its forecast increase of 4% to 7%.
It also warned that overall costs for a giant oil project in Kazakhstan would rise 25% to $45.2 billion. Exxon, a partner in the field, on Friday also said costs of the Tengiz project would affect its future spending.
Chevron shares were down less than 1% on Friday morning.
The second-largest U.S. oil company also said it expects additional costs in the fourth quarter from "high" refinery maintenance and from a $430 million tax payment.
Chevron's worldwide net oil equivalent production grew about 3% to 3.03 million barrels per day, but average sales prices fell both in the United States and internationally.
Production in the Permian Basin, the top U.S. shale field, rose 35% from the same period a year ago to 455,000 barrels of oil and gas daily, but its average U.S. liquids price was $47 per barrel, down from $62 a year ago.