Energy Mixed: Chevron Down 3% On EPS Miss; HAL, RIG Rise

[Stocks-to-Watch]

Shares of Chevron fell 3% Friday after the company said fourth quarter refining losses pushed earnings below analyst projections.

Chevron(CVX) reported earnings of $5.1 billion, or $2.58 per share, for the fourth quarter of 2011; the Street was looking for $2.85.* That compares to profits of $5.3 billion, or $2.64 per share,* in the 2010 fourth quarter. Shares fell $3.10 to $103.49.

With strong oil prices, the stock remains fairly close to its 52-week high of $110.99 and pays a 3% yield.

Full-year 2011 earnings were $26.9 billion, or $13.44 per share, a 41% increase over $19.0 billion, or$9.48 per share, in 2010.

In its earnings report, the integrated oil and gas exploration and refining giant, also reported daily production for the quarter of 2.64 million barrels of oil equivalent, a 4% decline over the fourth quarter of 2010. While expected, the production slide doesn’t bode well for 2012. The quarter was marred by an oil leak in Brazil and a natural gas blowout off the shores of Nigeria.

In light of negative news, analysts are looking hard at Chevron’s projected capital spending budget, which for 2012 could rise 26% vs 2011.* Simmons & Co. had this to say about the results:

Upstream performance was 13 cents per share worse than we had modeled, with the miss primarily concentrated internationally.* … Downstream earnings were very weak, resulting in a -12 cents per share variance vs. out estimate.* CVX announced preliminary reserve replacement of 171%, with the largest additions coming from the Wheatstone LNG [liquefied natural gas] project.

In other energy news Friday morning: *shares of Transocean (RIG) got a 3% lift after a favorable ruling on its liabilities in the Gulf of Mexico Macondo spill disaster of 2010. BP (BP) shares declined nearly 2% on the news. Oilfield services company Halliburton (HAL) stock also rose more than 3.6%; it hopes to resolve BP litigation and when it does, it could raise its dividend (see our Weekday Trader, “Spying 40% Upside for Halliburton,” Jan. 26, 2012.)



Original Article Source by Barrons.com