Chevron Q2 Net Income Dives 71 Percent Due to Lower Crude

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Chevron Q2 Net Income Dives 71 Percent Due to Lower Crude

SAN RAMON, Calif. -- Following the lead of other major oil companies such as ExxonMobil and Royal Dutch Shell, Chevron Corp. reported a substantial decline in net income in its second quarter earnings released Friday, due to lower crude oil prices, among other factors.

Chevron's second quarter net earnings totaled $1.75 billion for the second quarter 2009, compared with $5.98 billion in the year-ago period, the company stated. The company's downstream unit—covering refining marketing and transportation—generated income of $161 million, up from the $734 million net loss seen in the second quarter 2008. In the U.S., its downstream unit lessened its net loss, from $682 million in the year-ago quarter to a net loss of 95 million in the second quarter 2009.

"Although our downstream results were better than a year ago, the demand for refined products remained generally weak," Chairman and CEO Dave O’Reilly said in a statement. "Sales margins in this year’s second quarter were narrow, and our U.S. downstream business operated at a loss."

However, refined-product sales volumes increased 4 percent to 1.44 million barrels per day during the second quarter 2009, primarily due to higher gasoline sales. Branded gasoline sales volumes were also up 7 percent to 639,000 barrels per day, according to Chevron.

Sales and other operating revenues also dropped nearly 50 percent, totaling $40 billion in the second quarter 2009, from $81 billion in the second quarter 2008. The decline was primarily due to lower prices for refined products, crude oil and natural gas, the company stated.

CSNews Online reported last week Exxon Mobil Corp. and Royal Dutch Shell Plc, recorded their largest declines in second-quarter profit in more than a decade, due to slumping fuel demand that was a result of the record drop in oil prices.

ExxonMobil's net income fell 66 percent to $3.95 billion, while Shell's profit slid 67 percent to $3.8 billion. The second quarter marked the third straight quarter of declines for both companies.

"Prices are down big time, and that pulled down results across the board," William Andrews, manager of $7 billion in assets at C.S. McKee & Co. in Pittsburgh, including Shell stock, said in the report. "You’re comparing against a quarter when prices were over the moon, so everybody looks bad."

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