California-based oil giant Chevron reported its first losses Friday since 2002, as the global oil glut and low oil prices took a toll on the firm’s earnings.
The company posted a net loss of $588 million in the fourth quarter of 2015, compared to the net profit of $3.47 billion it reported in the final quarter of 2014.
Chevron is the likely bellwether of more losses to come, since it’s the first major oil company to release its fourth quarter earnings.
Exxon Mobil and ConocoPhillips will follow on Tuesday and Thursday, respectively. Analysts say to brace for more of the same, although Exxon is expected to fare better than others because of its huge chemical operations that benefit from low oil and gas prices.
“Our 2015 earnings were down significantly from the previous year, reflecting a nearly 50 percent year-on-year decline in crude oil prices,” said Chevron’s Chairman and CEO John Watson.
He added that the company is taking significant action to increase earnings in the low price environment. The company has cut operating expenses and capital spending by $9 billion, “and I expect similarly large reductions again in 2016,” he said.
The company is also selling off assets and taking in $6 billion in 2015 from the sales. Watson said asset sales will continue in 2016 and 2017.
