3q earnings lower due to almost $1 billion of one time items
Just checked the interm report on CVX web site. The table there lists all the one tie items. These one time items total some $1 billions. It is due to these on time items that earnings will be lower than 2q. However, 3q 2013 will still be more than 10% higher than 3q 2012.
don't forget that the ball and chain of downstream, the 19th century business that has plagued cvx' earnings for decades, has once again been a big negative...the myth that "the analysts give us credit for being integrated" continues...so why has Conoco, which has spun off its downstream, considerably outperformed cvx YTD ?...cvx will not take off and fly until the downstream disappears
Conoco has refining capiacity that was some 3 times of its crude production.
CVX has rwefining capacity now abouthte same as its own oil production. It is a almost perfect mathch for itself. CVX had more refining before, but they have sold out quaite a bit of them, now they are about right. Beesides, their refining is still quiate profitable. Bear in mind, some years, refining is quite profitsable, especially when crude prices are very low. Being intergrated like CVX and XOM, it has way better control over their operations. Over the long term, they are better investments.
The table that follows includes the estimated absolute values of select additional items in the full quarter.
$MM 3Q 2013 Comments
Foreign Exchange $(250) - $(350) Primarily balance sheet translation effects
Exploration Well Write-offs $(100) - $(200)
Timing Effects $(50) - $(150)
“All Other” Segment Guidance $(400) - $(500) Projected to be higher than the guidance range for the quarter
# # #
This is all just noise. its a big ship and it doesn't veer too far off course very often. They are spending huge investment money on LNG and getting next to no revenue from it this year. By the end of next year, it should be a totally different story. Mr. Market should be saavy enough to show the expected added margin about 6 months ahead of expected production. Big moves between now and then will come due to delays, or schedule improvement, or announcement of more cost overruns. See example of Imperial on the near disaster over timing of Kearl startup.