Chevron to Cut Up to 7,000 Jobs

StocksDow Jones Newswires

Chevron Corp. on Friday said it could cut 6,000 to 7,000 jobs and pare its capital spending by 25% next year, as profit tumbled in its third quarter.

Continue Reading Below

Still, results for the quarter fell less than Wall Street had expected. Shares of Chevron, down 20% this year, added 1% in premarket trading.

Chevron didn't detail when the job cuts could occur. As of December 2014, Chevron had about 64,700 employees, according to a securities filing.

The second-biggest U.S. oil company said it expects capital spending of $25 billion to $28 billion in 2016, down 25% from this year's budget. The company said it expects to cut spending further in 2017 and 2018, to around $20 billion to $24 billion.

For the quarter ended Sept. 30, Chevron reported earnings of $2.04 billion, or $1.09 a share, down from $5.6 billion, or $2.95 a share, a year earlier.

Revenue fell 37% to $34.32 billion.

Analysts polled by Thomson Reuters expected Chevron to post 76 cents a share in earnings on $29.76 billion in revenue for the third quarter.

A 15% reduction in capital spending to $7.97 billion helped prop up earnings in the period.

Foreign currency effects also added $394 million to profit in the quarter, up from $366 million a year earlier.

The company eked out a $59 million profit in its exploration and production segment, down from a profit of $4.65 billion a year earlier. Its U.S. segment swung to a loss of $603 million from a profit of $929 million a year earlier.

The company's average price for a barrel of crude oil and natural gas liquids was $42 in the quarter, down from $87 a year ago. The average price for natural gas was $1.96 per thousand cubic feet, down from $3.46 in the prior-year.

Refining, marketing and chemical operations�or downstream�earnings jumped 59% to $2.21 billion. Higher margins on refined products helped drive growth.

Chevron has profits that are better insulated than most oil producers because it also makes money from refining the fuel into gasoline and diesel. The lower-cost crude has helped its refinery businesses improve profit margins.

Exxon Mobil Corp. on Friday said revenue and profit slid in its third quarter as commodity prices tumbled, but results came in above Wall Street expectations as the company cut back on spending and benefited from fatter profits in its downstream business.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

Editor's Note: story updated to include corrected EPS and revenue estimate numbers.  Earlier versions included estimates from prior quarter.