Chevron Corp.’s second-quarter profit fell 11 percent, but topped analyst expectations, a positive surprise that could boost its stock and improve its bidding position in the takeover battle for Unocal Corp.
The San Ramon-based company said Friday that it earned $3.68 billion, or $1.76 per share, for the three months ended June 30 compared with net income of $4.13 billion, or $1.94 per share, at the same time last year.
Asset sales and tax benefits provided an $800 million lift to last year’s results.
Revenue for the period totaled $48.3 billion, a 26 percent increase from $38.2 billion last year.
This year’s quarterly earnings topped the mean estimate of $1.69 per share among analysts surveyed by Thomson Financial.
Exceeding those expectations was especially important for Chevron in this quarter as the company tries to prevail over China’s government-owned CNOOC Ltd. in a bidding battle for Unocal.
Unocal’s board is recommending that its shareholders accept Chevron’s bid — valued at $17.3 billion, or $64.02 per share through Thursday — but CNOOC is still trying to overcome U.S. political opposition to win out with its all-cash bid of $18.1 billion, or $67 per share. A vote of Unocal shareholders is scheduled Aug. 10.
Anything that causes Chevron’s stock to rise would help narrow the gap between the two offers because 60 percent of the Chevron bid consists of the company’s stock.
Besides analyzing the strength of Chevron’s second-quarter results, the investment community is likely to be focusing on the management’s outlook for the rest of this year in a conference call scheduled later this morning.
In a statement, Chevron Chairman Dave O’Reilly hailed the company’s strong results, despite refinery outages that prevented the company from fully capitalizing on high oil prices.
“I also look forward with much anticipation to the merger with Unocal and being able to combine the strengths of these two fine companies,” O’Reilly said. “At this year’s midpoint, the conditions are excellent for us to continue to adding value for our stockholders.”