Chevron Records 33% Jump in Profit

Surging gasoline prices helped ChevronTexaco Corp. report a 33% increase in first-quarter profit Friday.

Chevron, the nation’s second-largest oil company, reported a net income of $2.56 billion, or $2.40 a share, up from $1.92 billion, or $1.81, in the first three months of 2003. Sales rose 9% to $33.6 billion.

Excluding one-time items and discontinued operations, earnings rose 22% to $2.53 billon, or $2.37 a share, beating Wall Street’s consensus forecast of $2.02 a share.

Investors pushed the San Ramon, Calif.-based company’s stock up $1.15 to $91.50 in New York Stock Exchange trading on a day when the markets were generally down.

Chevron’s strong performance punctuated a week of banner earnings reports from U.S. oil refiners as increased demand for gasoline and tight supplies have kept pump prices high across the nation.

Chevron’s profit from its refining operations -- a segment that includes gasoline, diesel fuel and motor oil -- doubled to $640 million from the first quarter of 2003. But sales volume of refined products, measured in millions of barrels a day, rose just 5%.

“They are firing on all cylinders,” analyst Fadel Gheit of Oppenheimer & Co. said, predicting the company’s second-quarter results would look even better. “Unless we have a very sharp turn [in gasoline prices], refining margins are going to look even better in the second quarter than in the first.”

For motorists, that means gasoline prices, which have soared above $2 a gallon in many parts of the country, are unlikely to ease anytime soon.

Chevron benefited from its dominance in California, which typically has the highest gas prices in the country. Diesel prices also have soared in the Golden State to levels not seen elsewhere, and sparked protests Friday by independent truckers that snarled traffic near the ports of Los Angeles, Long Beach and Oakland.

Consumer advocates and public officials have accused the oil companies of price gouging, and the Federal Trade Commission began examining the state’s gasoline market after U.S. Sen. Barbara Boxer (D-Calif.) asked the agency to look into the situation.

Gheit said that fuel prices were rising in response to market forces and that the oil companies were simply cashing in while they could. Crude prices, which were expected to be at lower levels a year after the end of major combat in Iraq, have remained stubbornly high.

“The wind is in their sails, and they are going with it at a very fast clip,” he said.

Analysts said Chevron’s results also were helped by cost cutting and lower exploration expenses.

Chevron said it sold its crude oil in the United States for an average of $30 a barrel in the first quarter, $1 higher than the average in the same quarter of 2003.

Oil and natural gas production were off 10% and 13%, respectively, declines partly due to the sale of some fields.