NEW YORK (
did a better job than its peer U.S. Big Oil company
in the second quarter, but it's earnings on Friday capped a week in which Big Oil shares couldn't move the needle even after reporting big profit numbers.
U.S.-based Big Oil shares across the board declined over the five days of trading, on the combination of macroeconomic jitters and a lack of positive catalysts in the results from the companies. The latest U.S. GDP data disappointment, with the economy growing at the slowest pace since the recession ended, sent crude oil prices lower, too.
The profit increase year over year was sizable for Chevron, at 43%, but it was in line with the big numbers posted by other Big Oil companies, amounting to little more than a batch of impressive headline numbers that failed to impress investors.
Exxon Mobil's profit rose 41%, and
Royal Dutch Shell
profit rose by 56% in the second quarter.
Chevron reported earnings of $7.7 billion in the second quarter, or $3.85 per share, besting the Wall Street consensus of $3.56 earnings per share. In the year-ago second quarter, Chevron earned $5.4 billion.
The earnings beat from Chevron looked very good compared to
, which came in even below the low estimate on Wall Street.
The Chevron profit improvement was an eye-popping rise for sure, too, but not a number that would be a surprise to investors given the year-over-year change in crude oil. Chevron already telegraphed a profit boost earlier this month, too, and investors have been more focused on plans to lift long-term production.
In terms of production, Chevron was impacted by higher crude oil prices limiting the number of barrels that it receives in contracts with national oil companies, and its acquisition of Atlas Energy was not yet bearing enough fruit to change the overall production picture. Liquids production declined at twice the level of natural gas production in the quarter. Low natural gas prices have focused energy investors on the ability of oil companies to grow their liquids production specifically.
Net oil-equivalent production of 694,000 barrels per day in the second quarter of 2011 was down 2%, or 14,000 barrels per day, from a year earlier. Chevron said the decrease in production was associated with normal field declines and maintenance-related downtime and was only partially offset by production from the acquisition of Atlas Energy. The net liquids component of oil-equivalent production decreased 2% in the second quarter to 478,000 barrels per day, while net natural gas production declined 1% to 1.3 billion cubic feet per day.
Between Atlas Energy, Chevron's big play in the unconventional shale assets, and Exxon's big shale acquisition XTO Energy, neither is showing up in a big way yet in terms of production improvement.
Chevron was one more example of Big Oil earnings playing out according to expectations. The integrated oil companies need to meet or beat just to
Across both the integrated oil majors and independent exploration and production companies
has been met with a yawn from investors.
Chevron shares were trading close to flat on Friday, in line with the energy sector.
At midday Friday, the losses for the week from the U.S. Big Oil companies to report looked like this:
Exxon Mobil: -5.5%
The European oil majors managed slightly better performance on the week of Big Oil earnings, with Royal Dutch Shell close to flat in trading for the week, and BP shares declining by 1%. BP shares, though, already trade at a significant discount to peers given the overhang from the Macondo oil spill.
-- Written by Eric Rosenbaum from New York.
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