updated 10/9/2009 10:22:21 AM ET 2009-10-09T14:22:21

Chevron Corp. expects its third-quarter earnings to be significantly higher than the second quarter on higher crude oil prices and gains from asset sales and tax items.

The second-largest U.S. oil company said late Thursday it expects about $400 million in gains related to asset sales and tax items.

But the San Ramon, Calif.-based company said results from its downstream businesses such as refining and marketing are expected to be relatively flat.

Chevron previously reported it earned $1.75 billion, or 87 cents per share, in the second quarter, down 71 percent from $5.98 billion, or $2.90 per share, a year earlier.

The company didn't offer a specific third-quarter earnings estimate. But analysts surveyed by Thomson Reuters expect Chevron to earn $1.40 per share on revenue of $46.2 billion.

Chevron's third-quarter profit last year more than doubled on record crude prices during the summer. It earned $7.89 billion, or $3.85 a share, in the three months ended Sept. 30 — its largest quarterly profit in its 129-year corporate history.

Its shares rose 89 cents, or 1.3 percent, to $72.34 in morning trading Friday.

Chevron said Thursday its interim report for this year's third-quarter results was based on production volumes, margins and other items during a portion of the quarter and are "not necessarily indicative" of quarterly results. It cautioned that no one should "place undue reliance on this data."

It said it expects net after-tax charges will be between $250 million and $350 million. But it cautioned that actual results may "significantly differ" from the guidance range due to foreign currency effects and other factors.

Chevron said that compared with the average for the second quarter, net U.S. oil-equivalent production during the first two months of the third quarter increased 41,000 barrels per day mainly due to increased production in the Gulf of Mexico.

It said its U.S. and international refining indicator margins for the third quarter were mixed. Marketing indicator margins were higher in the United States but lower in the Asia-Pacific/Middle East/Africa area.

The company's third-quarter earnings report set for release on Oct. 30.

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