Chevron Corp. (CVX), the second largest U.S. oil company, said Thursday after the markets closed that it expects first quarter earnings to be sharply lower than the previous quarter due to lower crude oil and natural gas prices as well as significantly lower refined-product margins.

The San Ramon, California-based company earned $4.90 billion or $2.44 per share in the fourth quarter.

Analysts polled by Thomson Reuters currently expect the company to earn $0.94 per share for the first quarter. Analysts' estimates typically exclude special items.

In its interim update, midChevron said it expects first quarter upstream earnings to decline substantially, partly due to lower prices for crude oil and natural gas. Downstream earnings for the quarter are also expected to be much lower than in the prior quarter, with average margins on the sale of refined products off significantly. The company expects first quarter earnings from its Chemicals Segment to decline due to lower margins and volumes.

The company expects U.S. upstream results in the first quarter to include charges of about $100 million for write-offs mainly associated with exploration activities, while its international downstream earnings are expected to include gains of about $350 million from the sales of the fuels marketing businesses in Brazil and Nigeria.

In addition, the company projects $250 million to $350 million in charges related to corporate and other activities.

The company said total U.S. oil-equivalent production during the first two months of the first quarter improved 41,000 barrels per day mainly due to higher production in the Gulf of Mexico that was associated with ongoing restoration activities following the hurricanes last September and the ramp-up of production at Blind Faith.

International oil-equivalent production during the period increased 64,000 barrels per day. International natural-gas production increased nearly 4%.

U.S. crude-oil realizations for the first two months of the first quarter fell 35% from the prior quarter and 63% from a year earlier to $33.37 a barrel. International liquids realizations declined 19% from the prior quarter and 57% from last year to $37.78 a barrel.

U.S. natural-gas realizations decreased 15% from the fourth quarter and 41% from a year ago to $4.45 per thousand cubic feet, while average international natural-gas realizations fell 15% from the fourth quarter and 10% from a year earlier to $4.33 per thousand cubic feet.

Crude for May delivery settled Thursday at $52.17 a barrel on the New York Mercantile Exchange, well below the $147 record seen in July.

Chevron said U.S. refinery crude-input volumes during the first two months of the first quarter were essentially unchanged at 931,000 barrels per day. International refinery crude-input volumes increased 24,000 barrels per day mainly due to the completion of maintenance in Thailand.

Chevron is scheduled to release complete first-quarter results on May 1.

Last week, ConocoPhillips (COP) said that its first quarter results are likely to be impacted by lower natural gas prices, significant reduction in worldwide marketing margins and global refining margins, despite higher overall oil and gas output.

Chevron shares, which have traded in a range of $55.50 to $104.63 over the past year, closed Thursday's regular trading session at $69.23, up 75 cents or 1.10% but lost $1.23 or 1.72% in after hours trading.

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