(Reuters) – Chevron Corp CVX.N on Friday reported an adjusted third-quarter profit as oil prices recovered from spring lows and spending cuts benefited operating results, beating Wall Street expectations of a loss.
Chevron and its peers have slashed spending budgets this year on plummeting demand and crude oil prices that remain about 40% below where they began the year. Royal Dutch Shell Plc RDSa.L and BP Plc BP.L also posted higher-than-expected quarterly results after deep expense cuts this year.
The second-largest U.S. oil producer reported earnings of $201 million, or 11 cents per share, excluding one-time items. That compared with a profit of $2.9 billion, or $1.55 per share, a year earlier. Wall Street analysts had expected a loss of 27 cents for the quarter, Refinitiv Eikon data showed.
Net loss including the effect of foreign exchange and charges was $207 million, compared with a profit of $2.6 billion last year.
Shares rose a fraction to $69 in premarket trading on Friday.
Chief Financial Officer Pierre Breber said it was too soon to say the worst of the pandemic-related decline in oil demand was over.
Chevron is near the end of a year-long restructuring of its operations to reflect a prolonged period of low prices, Breber said. The effort will reduce its workforce by up to 15% of its 45,000 person staff.
Despite lower volumes, it posted modest operating profit in oil and gas production and refining by cutting expenses 12% and spending on new projects by 48%, excluding acquisitions, both from year-ago levels.
That helped offset cheaper fuel. While its oil sold last quarter for 63% more than in the second quarter, it still was well below the $47 a barrel price received a year ago.
“The world’s economy continues to operate below pre-pandemic levels, impacting demand for our products which are closely linked to economic activity,” Chief Executive Officer Michael Wirth said in a statement.
The company continues to give priority to its shareholder dividend even as cash flow from operations fell 57% from a year ago and turned negative in the third quarter.
In the top U.S. oil field, the Permian Basin shale field, Chevron expects output to dip to around 550,000 barrels of oil and gas per day, from 565,000 barrels per day this quarter, Breber said. It is likely to keep production there flat until the global economy recovers.
“The world doesn’t need more supply,” Breber said.