ChevronTexaco Corp on Friday reported a 5 percent rise in quarterly profit driven by surging oil prices, but weak earnings at its refining operations dragged results below Wall Street forecasts. The No 2 US oil company's refining and marketing profit fell 36 percent, hit by work stoppages at its three major US refineries and weak marketing margins overseas. Oil and gas production - the bread and butter of the company's operations - fell 7 percent from a year earlier.
"The earnings miss is annoying but not disastrous for ChevronTexaco," Credit Suisse First Boston analyst Mark Flannery said in a research note. "We assume that the weak operating result in US refining can be turned around quickly."
Net income in the first quarter rose to $2.68 billion, or $1.28 a share, from $2.56 billion, or $1.20 a share a year earlier. That was below analysts' average forecast of $1.38 a share, according to Reuters Estimates.
ChevronTexaco's results come a day after industry stalwart Exxon Mobil Corp, the world's largest publicly traded oil company, also posted profit that fell short of Wall Street estimates.
The shortfall in Exxon's results were also largely tied to its refining and marketing operations, which suffered from weak marketing margins.
The company had 36,000 barrels of oil and gas shut in the quarter because of the hurricane, an improvement from 60,000 barrels shut in during the fourth quarter, a ChevronTexaco executive said on a conference call with investors and analysts.
The production slide underlines the need for new projects and the deal struck earlier this month to buy smaller California rival Unocal for $16.4 billion, Deutsche Bank analyst Paul Sankey said in a research note.
Overall, sales and other operating revenues jumped 22 percent to $40.44 billion. Capital spending in the quarter stayed at the same level as a year earlier, at $1.7 billion.
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