Chevron Corp. said Friday that its second-quarter profit rose 11% to a record $6 billion, even though production slipped and the San Ramon, Calif., company lost money refining and selling fuel.
In the April-June quarter, Chevron, the country's second-largest oil company, posted net income of $6 billion, or $2.90 a share, up from $5.4 billion, or $2.52, in the year-ago quarter. Operating revenue rose 49% to $81 billion.
Analysts expected earnings of $3.03, according to a survey by Thomson Financial.
Chevron Chief Executive Dave O'Reilly said the company benefited from higher oil and natural gas prices, which boosted earnings from production ventures to $7.3 billion, nearly double the income from the year-earlier quarter.
But Chevron's refining and marketing business lost $734 million, compared with income of $1.3 billion in the second quarter of 2007. Chevron attributed the loss to its inability to fully pass along the rising price of crude, downtime at its refineries and a drop in fuel sales, particularly in the United States.
Production of oil and natural gas fell 3% to the equivalent of 2.54 million barrels a day because of price-related contract adjustments with other producers, Chevron said.
Chevron increased capital and exploratory spending by $640 million, to $5.2 billion, in the second quarter and bought back $2 billion worth of its common stock.
In a conference call with analysts, Chevron Chief Financial Officer Stephen J. Crowe said the company's oil projects, including sites off the coast of Nigeria and in the Gulf of Mexico, "are on track to deliver significant new volumes."
Critics have denounced the oil industry for reaping high profits while consumers struggle with record fuel prices. The dip in production at Chevron and other major oil companies also raised the ire of consumer groups, which said the company had plenty of resources to produce more oil in the United States but was slow in spending the money to develop them.
"The 'drill now, drill everywhere' campaign is a hoax on Americans," said Judy Dugan, research director of Consumer Watchdog, based in Santa Monica. "Oil companies are able to sit back and make more money by selling less."
Shares of Chevron fell 25 cents to $84.31.
On Thursday, Exxon Mobil Corp., the world's largest publicly traded oil company, posted second-quarter earnings of $11.68 billion, once again topping its own record for the biggest three-month profit ever by a U.S. corporation. Like Chevron, Exxon said its production fell during the quarter.