Chevron Outlines Dollar's Drag on Earnings

Chevron said third-quarter earnings will be lower than its performance in the second quarter with the weak U.S. dollar taking a $400 million bite out of its bottom line.
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NEW YORK (

TheStreet

) --

Chevron

(CVX) - Get Report

said late Tuesday that third-quarter earnings will be lower than its performance in the second quarter with the weak U.S. dollar taking a $400 million bite out of its bottomline.

The news doesn't come as a big shock, however, as Wall Street was already forecasting the oil and gas giant's profit would report a profit of $2.27 a share, down markedly from earnings of $2.70 a share in the second quarter ended in June.

Chevron said its International Upstream business will suffer the brunt of the impact from the greenback's weakness. The outlook reflects its business through the end of August.

Chevron shares were down a little less than 1% to $83.08 in extended trading on volume of more than 500,000, according to

Nasdaq.com

. So far in 2010, the stock had appreciated nearly 9% based on Tuesday's regular session close at $83.84.

Elsewhere in its forecast, Chevron noted it expects U.S. upstream earnings to reflect higher expenses related to the drilling moratorium in the Gulf of Mexico, and that U.S. total net oil-equivalent production declined by an average of 16,000 barrels per day in the first two months of the quarter.

Wall Street's current consensus estimate is for net income of $4.79 billion in Chevron's third quarter on revenue of $51.1 billion. In the second quarter ended in June, the company's net income totaled $5.41 billion on revenue of $51.1 billion.

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Written by Michael Baron in New York.

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