Chevron (CVX) said Friday its second-quarter earnings slipped 26% to miss Wall Street expectations, as lower production weighed on the oil and gas company’s performance.
The company, which trails only ExxonMobil (XOM) in market value among oil companies, has benefited from slightly higher natural gas prices. But its production primarily focuses on crude oil, which had been trading at lower prices amid a surge in U.S. shale production.
Chevron’s profit in the latest period was $5.37 billion, down from $7.21 billion in the year-ago period. On a per-share basis, earnings checked in at $2.77, below the prior year’s $3.66 and estimates of $2.96.
Revenue dropped 8.4% to $57.37 billion, beating calls for $56.01 billion.
Earnings from exploration and production fell 12% to $4.95 billion, as global production was down 1.6% to 2.58 million barrels a day of oil equivalent. Chevron said normal field declines overshadowed expanded projects in the U.S. and a project start-up in Angola.
Chevron’s downstream segment, which includes refining, marketing and chemical operations, saw its profit drop 59% to $766 million amid lower margins on refined product sales. The unit also recorded higher repair and maintenance expenses.
Overall operating margin narrowed to 15% from 19.6%.
Shares were trading 2.2% lower at $123.66 Friday morning.