Chevron reported quarterly profits that topped Wall Street’s expectations, as a drop in earnings in its main business lines from a year ago were offset by lower expenses.
Shares of the company were up 1.4 percent at $116.30 in premarket trading.
Chevron’s profit for the final quarter of 2018 jumped nearly 20 percent to $3.73 billion, or $1.95 per share. Analysts had been expecting earnings of $1.87 per share, according to Refinitiv.
The earnings beat was largely attributable to lower charges in the quarter due to tax impacts. Chevron faced just $419 million in charges last quarter, compared with $3.46 billion a year ago.
The San, Ramon California-based oil major generated $42.35 billion in revenues, compared with $46.13 billion forecast by Wall Street.
Profits in Chevron’s upstream business producing oil and natural gas fell nearly 38 percent from the year ago period to $3.29 billion, also due to U.S. tax impacts.
Chevron’s production of oil and natural gas increased 12 percent to 3.1 million barrels per day of oil equivalent in the quarter, bolstered by new liquefied natural gas output from its Wheatstone in Australia and surging output from its wells in the Permian Basin.
For the full year, Chevron reported record production at 2.93 million barrels per day of oil equivalent.
Last month, the company announced plans to spend $20 billion on development and exploration for 2019. The budget is focused on short-cycle projects, most of which are projected to generate cash within two years.
Earnings fell by a third to $859 million in Chevron’s downstream unit, which focuses on refining and selling fuels like gasoline. Profits from international refining operations rose seven-fold to $603 million due to better margins and currency factors. That offset tax impacts that dragged on U.S. downstream earnings.
Chevron has seen tighter profit margins in its downstream business, which focuses on refining and selling fuels like gasoline and diesel.
On Wednesday, Chevron announced it would buy Pasadena Refining System from Brazil’s Petrobras for $350 million. The deal will give Chevron control of a Pasadena, Texas refinery, its first processing facility in the Houston area and means of processing its growing Permian output.