Chevron’s Profit and Sales Soar

ChevronTexaco Corp. said Friday that its fourth-quarter profit nearly doubled as record energy prices made up for lower oil and natural gas production.

The San Ramon, Calif., oil company reported net income of $3.44 billion, or $1.63 a share, up from $1.74 billion, or 82 cents, a year earlier. Revenue, fueled by the high oil and gasoline prices that have plagued consumers, soared 41% to $42.7 billion.

“Our fourth-quarter performance capped a year of record earnings for our company,” Chief Executive Dave O’Reilly said.

At the same time, quarterly production declined 9%, ChevronTexaco said. The drop came in part because of asset sales and hurricane damage to pumping facilities in the Gulf of Mexico.

Several analysts said the reduced production, a situation shared by other major oil companies, was not likely to repeat in coming quarters.

“The company has told us they expect to see production increase by 3% a year,” said analyst Jacques Rousseau of Friedman Billings Ramsey & Co. “On an absolute basis, they had a great quarter.”

Although ChevronTexaco’s results exceeded the average forecast of $1.40 a share by analysts surveyed by Thomson First Call, the company’s shares fell 34 cents to $53.72 on the New York Stock Exchange on Friday. Analysts said investors were disappointed about ChevronTexaco’s oil-production decline on a day when many other oil shares also slumped on reports of softening crude oil prices.

Average fourth-quarter prices for crude oil and natural gas in the United States and abroad were up 40%, the company said. Crude-oil futures in New York hit a record high of $55.17 a barrel in October.

Rousseau said the company’s biggest gains came from its service station operations in Europe and its oil refining businesses in Asia.

But West Coast gasoline prices also contributed heavily to the quarter’s performance, Chief Financial Officer Steve Crowe said in a conference call with analysts. The nation’s second-largest oil company said its U.S. gasoline sales unit made $372 million in the fourth quarter, nearly five times the $77 million it earned a year earlier.

The quarterly earnings boost enabled the company to cut debt during the period by $1.3 billion, to a total of $11 billion, repurchase $750 million of its stock and pump $400 million into its pension plans, O’Reilly said.

For the full year, the company earned $13.3 billion, or $6.28 a share, up 85% from $7.2 billion, or $3.48, a year earlier. Revenue rose 28% to $155.3 billion from $121.3 billion.