Chevron (NYSE:CVX) warned late Wednesday its fourth-quarter earnings are expected to fall “significantly below” its third-quarter results due to shrinking margins and volumes in its downstream segment.
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The No. 2 U.S. energy company joined a number of other companies, mostly in the retail sector, by issuing a profit warning ahead of its full results.
San Ramon, Calif.-based Chevron said it expects a “near breakeven” quarter for its downstream operations due to lower margins, shrinking refinery input volumes and the absence of an asset sale gain.
Last quarter Chevron earned $3.92 a share and analysts had been calling for fourth-quarter EPS of $3.27.
Chevron said U.S. refinery crude-input volumes declined by 180,000 barrels per day due mostly to a major turnaround at a refinery in Richmond, Calif. Internationally, daily refinery crude-input volumes slid 90,000 barrels per day for the first two months of the quarter.
Chevron also warned it expects total net charges for the fourth quarter to be “notably higher” than its general guidance range of $250 million to $350 million.
On the other hand, the energy heavyweight said it anticipates its upstream earnings to be “comparable” with the prior quarter. During the first two months of the fourth quarter, Chevron said its U.S. crude oil realizations jumped $5.14 a barrel, while international liquids realizations shrank $1.04 to $101.78 a barrel.
Shares of Chevron, which have soared almost 20% over the past year, slid 2.29% to $105.30 after the closing bell.
Chevron is scheduled to release its full results on January 27.