Chevron (CVX) Q3 profit slumps despite higher oil prices

Chevron posted a third-quarter profit that missed Wall Street estimates by a wide margin, sending its share price down in premarket trading.

Oil company earnings have slumped from record year-ago levels as crude prices eased and higher costs crimped refining and chemical profits. Results remain strong by historical standards but are well off year-ago levels.

The company earned $6.5 billion, or $3.48 per share, compared with $11.2 billion, or $5.78 per share, in the same period last year.

Adjusted profit was $3.05 a share, compared with analysts’ estimate of $3.75 per share, according to LSEG data.

Shares fell a fraction to $153.65 in premarket trading.

Results come after Chevron agreed to buy U.S. Hess for $53 billion to expand its shale and deepwater oil production. The Hess deal was the latest in a series of purchases.

Chevron has spent heavily in recent months to expand its reserves of oil and gas and to build its lower-carbon business. In addition to Hess, it acquired shale oil and gas producer PDC Energy and ACES Delta, a hydrogen storage firm.

The earnings miss came after the company warned that maintenance in its oil and gas production and refining businesses would hurt results.

Profit from pumping oil and gas fell about 38% to $5.76 billion in the quarter from $9.3 billion a year ago. But volume rose to 3.1 million barrels of oil and gas per day (boed) on its acquisition of PDC Energy. It pumped 3.0 million boed a year ago.

Oil prices recently rebounded from a mid-year slump as tighter supplies drove up crude prices.

Its refining business posted an operating profit of $1.68 billion, down from $2.53 billion a year ago. Gains from its U.S. refining business were offset by weakness overseas, where margins and inputs fell.