Asset Sales Propel Chevron's Downstream Earnings
SAN RAMON, Calif. – Improved margins and gains from asset sales boosted Chevron Corp.'s downstream earnings in its 2012 fiscal second quarter.
The oil company's global downstream division, home to its convenience stores, earned $1.88 billion for its latest quarter ending June 30, compared to $1.044 billion in its 2011 second quarter.
"In the downstream business, we continued divesting non-core assets, while also furthering work on new growth investments," said John Watson, Chevron's chairman and CEO. Asset sales included Chevron's fuels, marketing and aviation businesses in the Caribbean.
Chevron is not alone in benefitting from asset sale profits in its 2012 fiscal second quarter. Both ExxonMobil Corp. and Royal Dutch Shell plc also announced asset sale gains during their respective earnings calls yesterday.
Among Chevron's $1.88-billion global downstream profit, the company's U.S. downstream division saw net earnings of $802 million. The San Ramon, Calif.-based company earned $564 million at its U.S. downstream division last year.
"We had better marketing margins on the West Coast [of the United States] and better refining margins in our latest quarter," Pat Yarrington, Chevron's vice president and CFO, said when talking about improved U.S. downstream earnings during its earnings conference call today.
As for the entire company, Chevron earned a net profit of $7.2 billion vs. a $7.7-billion profit in its 2011 second quarter. Total sales and operating revenues came in at $60 billion, compared to $67 billion during the same timeframe last year.
"Earnings and cash generation were among our strongest ever," Yarrington noted.