Chevron Posts Record Q2 Profit, Earning $5.98 Billion

August 1, 2008 5:42 p.m. EST

Houston, TX (AHN) - Chevron Corp. reported a record second quarter profit of $5.98 billion on Friday sparked by a near 50 percent surge in revenue due to the rise in oil prices.

The oil company's second quarter profit equates to 2.90 a share, compared to the $5.38 billion or $2.52 a share profit made in the same period a year ago.

Revenue to $82.9 billion, up from $56.1 billion last year. However, the record results came short of analyst expectations. According to Thomson Financials, the average estimate called for profit of $3.03 a share on $92.4 billion.

The record results come just a day after oil giant Exxon Mobil reported record second quarter earnings as oil price increases helped pad profits for the industry as a whole.

Chevron saw strong earnings growth from its oil exploration and production division, which posted a $7.25 billion profit, nearly doubling profits from a year earlier.

The company did suffer a net loss in its gas and refinery division as the revenue made from gasoline sales did not cover the costs of producing it. The unit lost $734 million, compared with a $1.3 billion profit in the second quarter last year.

"The higher cost of crude oil used in the refining process was not fully recovered in the price of gasoline and other refined products," said Chairman and CEO Dave O'Reilly, according to the Associated Press. "As a result, our downstream operations incurred a loss in the second quarter, with most of the loss taking place in the United States."

Chevron said the average price in the second quarter for a barrel of crude oil was $109, up from the $57 average in the second quarter of 2007.

Shares of Chevron are trading slightly lower on Friday, down 20 cents to $61.25.