U.S. energy giant Chevron Corp. posted the lowest net profit in Q4 2014 in five years due to tumbling oil prices. The second biggest U.S. oil company reported $3.47 billion or $1.85 per share in profit for the last three months of 2014, down 30% from a year ago. The profit figure came out at its lowest since the 2009 recession. Sales and other operating revenues in Q4 2014 were $42 billion compared to $54 billion in the year-ago period. Analysts polled by FactSet had forecasted the net profit at $1.64 per share and the quarterly revenues of $35.82 billion. Full-year earnings in 2014 came out at $19.42 billion compared to $21.42 billion in 2013. Gains shrank to $200.5 billion from $220.16 billion.
The oil major announced a $35.0 billion capital and exploratory investment program for 2015, which is trimmed by 13% compared to the total capital spending in 2014. The consensus projected a 15% cut.
Oil output equaled 2.58 million barrels per day in Q4 2014 which was the same a year ago. Unless oil prices rebound significantly, that cash may not be enough to cover the company's spending on exploration and production. Given a 60% drop in oil prices since June last year, the pain from lower oil prices was cushioned by Chevron’s refining business into fuels like gasoline and diesel, which reported profits quadrupled over a year ago. In Q4 2014, an average oil price was $68 a barrel compared to $101 a barrel in the same period of 2013. Natural gas’ price tag was $5.38 per 1,000 cubic feet in the final quarter of 2014 against $5.75 a year ago.
During pre-market trading on January 30, 2015, Chevron Corp.’s shares dropped 1.7% at the New York Stock Exchange. The company capitalization has contracted 12% for the recent three months.
