Chevron has been slashing capital spending almost in half and is cutting thousands of jobs as it expected massive third-quarter losses, but the oil giant managed a surprise profit.
Bloomberg estimated that Chevron would lose 27 cents per share as crude oil demand nosedives amid the pandemic, but Chevron earned 11 cents per share on an adjusted basis, according to CNBC. In the previous quarter, it had lost $1.59 per share.
The outlook remains bleak, with revenue being down 32% from the previous year and third-quarter losses estimated at $207 million. As it plans to reduce workforce by 6,000, it is anticipating a $500 million cost in severances, according to Yahoo! Finance.
“We remain focused on what we can control – safe operations, capital discipline and cost management,” Chief Executive Officer Mike Wirth said in a statement.
Chevron acquired Noble Energy earlier this month in an all-stock deal. Chevron has dropped 43% this year.
“We’re not trying to sustain short-term production,” Chevron Chief Financial Officer Pierre Breber said to analysts on a conference call that CNBC reported. “We’re in an economy that’s impacted by its pandemic and demand for our products is below normal levels and pre-pandemic levels. Therefore, we have oversupplied our markets.”
It is no better elsewhere in the oil game. Exxon lost 18 cents per share on an adjusted basis and reported losses ($680 million) for a third consecutive quarter, CNBC said. Exxon announced this week that it will lay off 1,900 employees.Gas prices are dropping across the nation, but that is not always a good indicator for the oil industry.