Chevron earnings Q1 2019

Chevron on Friday reported first-quarter earnings that beat analysts’ expectations, even as profits fell from a year ago, weighed down by lower oil prices and weak profit margins in its refining and chemicals business.

Shares of the San Ramon, California-based oil giant were slightly higher in premarket trading after the report.

Chevron earned $2.65 billion in the first quarter of the year, down 27% from a year ago.

The results were bolstered by a 7% jump in oil and natural gas production, with total output exceeding 3 million barrels per day of oil equivalent for the second quarter in a row. Chevron pinned the increase on rising volumes from its Permian Basin fields in Texas and New Mexico, as well as its Wheatstone project in Australia.

Earnings in Chevron’s U.S. upstream business jumped by $100 million to $748 million, while international profits for producing oil and gas fell 12% to $2.38 billion.

Profits tumbled about 65% to $252 million from a year ago in Chevron’s downstream business, which focuses on refining oil into products like gasoline and diesel.

Chevron also saw its expenses surge 64% to $726 million, driven by higher corporate charges and interest expenses, as well as foreign currency impacts.

Here’s how the company did compared with what Wall Street expected:

• Earnings: $1.39 per share vs. $1.30 per share, according to Refinitiv
• Revenue: $35.2 billion vs. $38.43 billion, according to Refinitiv

Chevron’s performance in the Permian Basin and production forecasts for the Texas-New Mexico oil region will be in focus. The company announced plans last month to double its output from the top U.S. shale oil basin by 2023.

The oil and gas giant struck a $33 billion deal earlier this month to buy Anadarko Petroleum, a diversified driller with a large stake in the Permian. Occidental Petroleum launched a rival offer for Anadarko this week, potentially setting up a rare bidding war in the oil patch.

The Anadarko deal underpins Chevron’s decision to increase its share buyback program from $4 billion to $5 billion per year.

On Wednesday, Chevron announced a quarterly dividend of $1.19 per share, unchanged from last quarter, when the company raised the shareholder payout by 7 cents.