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SAN RAMON, Calif. -- ChevronTexaco Corp.'s third-quarter profit improved by 62 percent as the oil giant continued to benefit from oil-price spikes, reported the Associated Press. The San Ramon-based company said Friday that it earned $3.2 billion during the three months ended in September, compared with net income of $1.98 billion at the same time last year.
The quarter included a $486 million windfall from the sale of gas stations and other properties that ChevronTexaco had put on the auction block earlier in the year. Revenue for the period totaled $40.72 billion, a 32 percent increase from $30.84 billion at the same time last year.
The performance continued a recent roll for ChevronTexaco, which is well on its way to its most prosperous year since the company's inception in 1879. Through the first nine months of the year, ChevronTexaco earned $9.89 billion, nearly doubling its profit of $5.5 billion at the same juncture last year. Revenue through the first nine months totaled $112.57 billion, up from $90.88 billion last year.
Like the rest of the industry, ChevronTexaco's profits are soaring along with oil prices. Driven by worries about the turmoil in Iraq and rising worldwide demand, the cost of crude oil periodically has gone above $50 per barrel in recent weeks.
"As long as the prices stay up, the earnings (of big oil companies) are going to stay up, but I expect things to start coming down soon," said industry analyst Fadel Gheit of Oppenheimer & Co.
The recent market conditions helped ChevronTexaco boost its average price for U.S. crude oil and natural gas liquids to $36.26 per barrel, a 40 percent increase from last year.
The run-up has forced many households and businesses to cut corners as gasoline prices have climbed above $2 per gallon. In California -- typically the nation's most expensive gasoline market -- prices at the pump have gushed above $2.50 per gallon. The rise in oil prices has been so rapid that ChevronTexaco hasn't been able to pass on the costs quickly enough to U.S. motorists, management told analysts during a Friday conference call.
The unusual situation turned U.S. gasoline sales into a financial drag on ChevronTexaco during the third quarter, even as other parts of its business benefited from higher oil prices.
The U.S division that markets ChevronTexaco gasoline earned $96 million, a 35 percent drop from $148 million at the same time last year. If not for several one-time items, ChevronTexaco said the division would have lost $50 million.