The company managed to triple its earnings to $5.41 billion, or $2.70 per share, on revenue that jumped to $53 billion from $40.2 billion the year before. The analysts who follow the company had bet on $2.44 per share.
As CEO John Watson noted, "We had another very successful quarter -- both operationally and financially." As has been the case with the other members of the contingent, Chevron benefited from increased oil and natural gas prices, stronger refinery margins, and a 3% production improvement.
Chevron performed well both upstream and downstream. Noteworthy in the upstream was a pair of deepwater gas finds in Australia's Carnarvon Basin, while there also was progress of one kind or another in the U.S., Brazil, Kazakhstan, Indonesia, Romania, Venezuela, Russia, and Canada. The downstream is undergoing a restructuring and cost-cutting program, which CFO Patricia Yarrington expects will be in place by the end of the third quarter.
However, like many of its peers, all is not completely copasetic with Chevron. As George Kirkland, vice chairman of the board and executive vice president of global upstream and gas, noted on the call, when the Gulf drilling halt began, Chevron was completing a Tahiti development well and drilling a pair of appraisal and exploration wells. The Tahiti well is nearly onstream, but the other two are suspended, and two more planned wells are delayed. Those stoppages are, "negatively impacting our 2010 exploration program," he said.
Kirkland also said that "Chevron is a leader in safety performance, and we're very confident in our abilities to safely drill and develop our deepwater projects. We believe that investigations of this tragedy will show that it was preventable."
As you know, several of the majors, including ExxonMobil
Nevertheless, for a long time to come, the Gulf will likely be a disaster for companies attempting to operate in it. While I believe that Chevron is solid, I'd still head first for Exxon -- which has largely escaped the allure of the Gulf -- with my Big Oil investments.
Fool contributor David Lee Smith doesn't own shares in any of the companies named above. He does welcome your comments or questions. Chevron is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.