Chevron and Unocal profit beat forecasts

Chevron Corp and its take-over target Unocal Corp both reported better-than-expected quarterly profit on Friday, but poor refining results took some of the shine off Chevron's numbers. Chevron, which is locked in a battle with Chinese oil firm CNOOC Ltd to buy Unocal, needed to turn in a solid quarter to boost its chances of winning the smaller US oil producer, analysts said.
"Given the very low valuation of the stock, any positive surprise was all Chevron needed this quarter," Credit Suisse First Boston analysts said in a research note. "However, this is not a blow-out quarter, and bears will point out a relatively weak refining and marketing result against other large US refiners."
Unocal has accepted a sweetened $17 billion take-over offer from Chevron. CNOOC has offered $18.5 billion, but its bid has run into opposition in the US Congress among lawmakers leery of letting a major US oil company be acquired by a firm controlled by the Chinese government.
Shares of both Chevron and Unocal were down fractionally in morning trade.
Chevron, the nation's No 2 oil company, said second-quarter profit fell 10 percent as refinery outages and a sharp decline in oil and gas production outweighed a boost from soaring oil and gas prices.
But net income of $3.7 billion, or $1.76 a share, easily beat the average forecast of $1.65 a share among analysts polled by Reuters Estimates.
The company earned $4.1 billion, or $1.94 a share, a year earlier.
Unocal's second-quarter earnings jumped to $475 million, or $1.73 a share, from $341 million, or $1.25 a share, a year earlier, boosted by higher oil and gas prices.
Excluding special items, Unocal's earnings were $1.77 per share, well above analysts' average forecast of $1.67.
In their earnings reports, Chevron and Unocal had little to say about their closely watched take-over saga, except for Chevron's comment that it is looking forward to completing the deal. Earnings at Chevron's refining and marketing operations fell 7 percent from a year earlier, hurt by downtime for maintenance and repairs at two refineries.
Oil and gas production, including volumes produced from oil sands and production under an operating service agreement, fell 6 percent.
Chevron shares were down 30 cents at $58.64, and Unocal shares were off 43 cents at $64.77, both on the New York Stock Exchange.