Chevron Corp., the second-largest U.S. oil company, reported a 43 percent jump in quarterly profit Friday, beating Wall Street forecasts as high oil prices and fat refinery margins offset a drop in its oil output.
Chevron's surging earnings were the latest in a string of huge profits reported this week by the industry that has benefited from the highest oil prices in nearly three years.
Exxon Mobil and Royal Dutch Shell both reported higher earnings this week, boosted by their acquisitions and shifts into new projects.
Chevron's better-than-expected profit was largely due to a strong performance by its U.S. and international refineries, which both topped forecasts, according to Fadel Gheit, analyst with Oppenheimer & Co.
Still, the oil and gas production business yielded nearly 90 percent of the company's profits.
"This is the most leveraged company to oil price in the whole group," Gheit said.
Chevron's second-quarter profit rose to $7.7 billion, or $3.85 per share, from $5.4 billion, or $2.70 per share, a year earlier.
Analysts had expected the company to post earnings of $3.56 per share, according to Thomson Reuters I/B/E/S.
Shares of Chevron fell 1.6 percent to $103.35 in early trading on the New York Stock Exchange amid a broad sell-off in the market.
Chevron reported 2.69 million barrels per day (bpd) of oil-equivalent production, compared with 2.75 million in the year-ago.
Chevron had targeted average 2011 output of 2.79 million bpd, or 1 percent growth, but that plan assumed lower oil prices. Higher crude prices mean Chevron must leave more production in the hands of its state-owned partners.
European benchmark Brent oil prices averaged $117 per barrel in the second quarter, up from $79 in the same quarter in 2010 and $11 higher than the first quarter. Chevron said in April that it switched to Brent from the U.S. benchmark when calculating production-sharing changes.
Revenue rose 30 percent to $69 billion.
On Thursday, Exxon Mobil reported a 41 percent increase in quarterly profit, but fell short of analysts' forecasts.
Through Thursday's close, Chevron stock is up 15 percent so far this year, outpacing the Chicago Board Options Exchange oil companies' index which is up 8 percent over the same period.
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