Refining losses marred the fourth-quarter performance for Chevron Corp., the nation's second-biggest oil company, leaving it with a profit decline compared with 2010 and dropping it below Wall Street expectations.
The San Ramon, Calif., oil giant said Friday that it earned $5.12 billion, or $2.58 a share, down 3.2% from $5.3 billion, or $2.64, in the final three months of 2010, even though the price of oil in the fourth quarter of 2011 was substantially higher than it had been a year earlier. Wall Street analysts had been expecting profit of $2.84 to $2.88 a share.
"If you are in the upstream part of the business, drilling for oil, you are making money," said James L. Williams of WTRG Economics. "If you are downstream, in refining, you are losing."
Chevron's refinery and marketing business lost $204 million in the fourth quarter, compared with a profit of $475 million in the year-earlier period.
Chevron Chief Executive John Watson emphasized the positive, saying the company "had an outstanding year financially, with record earnings and cash flow."
For the full year, Chevron earned $26.9 billion, or $13.44 a share, up from $19 billion, or $9.48, in 2010.
Fourth-quarter sales climbed to $58 billion, compared with $52 billion in the fourth quarter of 2010.
Fourth-quarter oil production declined to 2.64 million barrels a day from 2.79 million barrels in the same quarter a year earlier, but the company added 1.67 billion barrels of net oil reserves during 2011.
Chevron stock fell $2.63, or 2.5%, to $103.96.