Chevron Corp. swung to a profit in the first quarter as the oil-and-gas giant's expense-slashing efforts pay off and a tough pricing environment shows signs of softening.
Shares in the No. 2 energy company in the U.S., down 11% so far this year, gained 1.7% premarket Friday to $107.21.
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Pressured by the prolonged swoon in oil prices cutting into profitability, the San Ramon, Calif.-based company has launched efforts to slash thousands of jobs and cut billions of dollars from its capital-spending budget. Chevron said it had 55,200 employees at the end of 2016, down 15% from the end of 2014.
"We continue to make good progress on reducing our spend," said Chief Executive John Watson.
In the latest period, operating expenses were 14% percent lower than a year ago and capital spending declined more than 30%.
The company's average sales price per barrel of crude oil and natural gas liquids was $49, up from $29 in the year-ago period.
In all for the March quarter, Chevron reported a profit of $2.68 billion, or $1.41 a share, compared with a loss of $725 million, or 39 cents a share, the year before. Analysts polled by Thomson Reuters expected Chevron to report earnings of 86 cents a share.
Revenue surged 42% to $33.42 billion, topping the average analyst estimate of $33.3 billion.
Profit in Chevron's downstream, or refining, operations jumped 26% to $926 million in the quarter.
Upstream operations, which include exploration and drilling, meanwhile, in the U.S., swung to an $80 million profit from a $850 million loss a year earlier. Higher crude oil prices and lower depreciation and operating expenses fueled the swing to profitability.
Rival Exxon Mobil Corp., the largest U.S. oil company, on Friday said its profit more than doubled in the first quarter, signaling a strengthening in business amid a reprieve in commodity price depression.
Write to Anne Steele at email@example.com
(END) Dow Jones Newswires
April 28, 2017 09:40 ET (13:40 GMT)