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NEW YORK -- The first quarter for Chevron Corp., the second-biggest U.S. energy company, saw the largest profit increase in at least a decade, following an global economy recovery that charged up fuel demand, Bloomberg News reported.
First-quarter net income more than doubled to $4.55 billion, from $1.84 billion a year earlier, according to the report. Revenue increased 33 percent to $48.2 billion, the report stated.
Worldwide demand for crude oil rose by 1.84 million barrels a day during the first quarter, according to the International Energy Agency in Paris, which was cited in the report.
Chevron Chief Executive Officer John Watson has worked to boost oil and natural-gas output by 4.5 percent with new wells, while selling money-losing assets and shifting capital to oil and natural-gas fields according to Edward Westlake, an analyst at Credit Suisse in New York.
"Production was above expectations so it's very hard to shoot any holes in their story," Robbert Van Batenburg, head of research at Louis Capital Markets LP in New York, told Bloomberg News. "As long as they continue to bring new projects on line, it's blue skies ahead."
Meanwhile, Sunoco Inc. reported a first quarter loss of $63 million that it blamed on a worldwide oversupply of petroleum and chemical products, though it was making progress to control costs, the Philadelphia Inquirer reported. The company earned $12 million a year earlier.
Excluding special items, the company reported first-quarter income of $17 million, representing the first time in a year that income has been positive, the report stated.
"While first-quarter results reflect the continued challenges caused by ongoing economic weakness and excess global supply of petroleum and chemical products, our nonrefining businesses continue to generate steady earnings," Lynn L. Elsenhans, chairwoman and chief executive officer, was quoted as saying in the report.
Sunoco's earnings from retail marketing, logistics and coke operations totaled $75 million, up from $61 million in the first quarter of 2009. The company's core refining business, however, saw a loss from continuing operations of $42 million.
In other earnings news, Tesoro Corp. reported a first quarter 2010 net loss of $155 million, from net earnings of $51 million a year ago. The 2010 results include an after-tax write-off of $12 million, associated with the deferral of a capital project at the Los Angeles refinery, along with an additional $7 million tax charge related to health care legislation.
Excluding the charges, first quarter segment operating loss was $125 million, compared to segment operating income of $162 million in the first quarter a year ago. The decrease was primarily due to lower West Coast gasoline and diesel margins, as a result of excess product inventories among other factors.
"The combination of excess gasoline inventories and seasonally weak product demand on the West Coast significantly impacted our first quarter financial results," Bruce Smith, chairman, president and CEO of Tesoro, said in a statement. "Although we aren't pleased with these results, we did see signs of improving gasoline demand and subsequently margins during the quarter. In January, the Department of Energy reported positive year over year gasoline and diesel demand growth on the West Coast. Additionally, we saw West Coast gasoline demand increase from January to March, a pattern that has been typical during the first quarter in years past. While we are taking a conservative approach to our summer plans, these are good indicators of the continuing stability we are seeing in our markets."
Capital spending, including turnarounds, for the first quarter 2010 was $99 million and below company guidance. For the full year 2010, Tesoro anticipates a capital program, including turnarounds, in the range of $500 to $525 million. It also expects to spend $60 million on quick hit capital projects for the year.
"While there are near-term economic concerns in the West Coast market, including the high California unemployment rate, we believe the structure of the West Coast market has not changed and that re-investing in our assets is the best way to create value for our shareholders," said Smith. "I am pleased that we preserved the strength of the balance sheet through what was a very difficult first quarter."
The company also provided an update on the April 2 Washington refinery fire, which fatally injured seven employees. The company is temporarily shutting down all processing units at the refinery.
"The Tesoro family deeply regrets the tragic accident that took seven lives and impacted so many other people. There are no words that can adequately express our sense of loss nor the impact on the communities and schools in the area," said Smith.
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