WRAPUP 4-Chevron, Total Q3 profits disappoint, shares down

* Chevron Q3 net income down 1.6 pct

* Total Q3 net profit up 32 pct, leaving out one-offs

* Both fail to match rivals’ outperformance of forecasts

* Chevron shares down 2.2 pct, Total closes slightly lower

* BP to report results next Tuesday
(Adds more on Chevron shortfall, closing prices, BP results)

By Braden Reddall and Matthias Blamont

SAN FRANCISCO/PARIS, Oct 29 (BestGrowthStock) – Second-tier oil
majors disappointed investors by failing to match the strong
profit growth of larger peers, with Chevron Corp (CVX.N: ) short
of estimates and Total (TOTF.PA: ) simply matching expectations.

The impact on Chevron’s results of a weakened U.S. dollar,
which fell 7 percent against a basket of currencies in the
third quarter (.DXY: ), was a big part of its profit shortfall.

While refining earnings were far better than last year,
both companies are wrestling with refinery issues. Total said
weeks of strikes, which ended Friday [ID:nLDE69S09K], cost it
100 million euros ($139 million), while Chevron painted a bleak
picture of fuel demand and overcapacity for years to come.

“In the refining sector, we continue to see pretty tepid
demand growth,” said Mike Wirth, Chevron’s executive vice
president for global downstream. “Some parts of the world are
certainly showing decent demand growth, others are not.”

He was confident about long-term prospects for Asia, where
Chevron has major refining interests, but he said Asia was not
uniform, with demand weak in Japan, the Philippines, Thailand
and South Korea, but strong in Singapore, Vietnam and China.

Asia’s top oil refiner, Sinopec (0386.HK: ), reported a 15
percent rise in profit on Thursday. [ID:nTOE69Q03O]

Chevron reported on Friday a 1.6 percent decline in
third-quarter net income from the same quarter a year before,
when profits were boosted by asset sales. [ID:nN29136104]

“This was definitely a disappointing result,” Argus
Research analyst Phil Weiss said, pointing to higher U.S. costs
resulting largely from the Gulf of Mexico drilling moratorium
that followed BP Plc’s (BP.L: ) disastrous well blowout.

Shares of Chevron, having outperformed those of many rivals
so far in 2010, took a big hit on Friday, falling 2.2 percent,
while Total shares ended slightly lower.

Stripping out one-offs, Total’s profit rose 32 percent, in
line with the average estimates. [ID:nLDE69R1P0] Analysts at
Simmons & Co in Houston welcomed its “logical” decision to
start paying dividends every quarter, in line with peers.

The largest non-government-controlled oil company by market
value, Exxon Mobil Corp (XOM.N: ), reported a 55 percent jump in
net income on Thursday, while its nearest rival, Royal Dutch
Shell Plc (RDSa.L: ), reported an 18 percent rise, which would
have been higher but for non-cash charges. [ID:nLDE69R0XR]

Analysts at Bernstein said Shell made the other results
look “slightly disappointing.” Chevron and Total are the third-
and fourth-largest private-sector oil majors by market value.

BP is due to report its third-quarter results on Nov. 2.

(Graphic http://r.reuters.com/suh72q )

PRODUCTION RISES

Oil prices were around 12 percent higher in the third
quarter compared with the same period last year, while U.S. and
European gas prices also rose sharply.

Total’s production grew 4.3 percent to 2.34 million barrels
of oil equivalent per day (boepd) in the quarter, powered by
higher gas output, as crude production fell.

Chevron said production rose 1 percent in the quarter to
2.74 million boepd, but confirmed it was on track to hit its
2010 target for average output of 2.78 million boepd.

Total, Europe’s largest refiner, said refining margins rose
37 percent in the quarter versus the same period of 2009.

Higher crude processing margins also benefited Finnish
refiner Neste Oil (NES1V.HE: ), which reported a 49 percent rise
in net income. [ID:nLDE69S07Y]

As of Thursday, shares of Chevron had gained 10 percent in
2010, while the Chicago Board Options Exchange’s oil company
index (.OIX: ) — which includes BP’s battered shares — was down
1 percent. Total shares have lost 13 percent so far this year.
($1=.7205 Euro)
(Additional reporting by Tom Bergin in London, Terhi Kinnunen
in Helsinki and Benjamin Mallet in Paris; Writing by Braden
Reddall; editing by David Cowell, Dave Zimmerman and Andre
Grenon)

WRAPUP 4-Chevron, Total Q3 profits disappoint, shares down