HOUSTON Chevron Corp beat Wall Street estimates for third-quarter profit on Friday, helped by higher oil and gas output, but its earnings fell from a year ago.

The US company, whose proposed US$53-billion takeover of Hess has been delayed due to a challenge by rivals Exxon Mobil and CNOOC Ltd, reported an adjusted profit of US$4.53 billion, compared to US$5.72 billion a year ago.

Shares rose 2% before normal trading hours.

Oil industry profits have sagged this year due to softer crude prices and weaker fuel demand growth. Oil futures in the quarter ended Sept 30 averaged 17% below the prior quarter, and global fuel margins have suffered from slowing demand growth and excess supplies.

European oil majors BP and TotalEnergies this week also posted weaker results on sharp year-over-year declines in refining margins and lower oil prices. Exxon Mobil posted higher-than-expected profit on raised oil production, but profit fell 5% from a year ago.

Chevron said it earned US$2.51 per share for the quarter on an adjusted basis, compared to analysts' estimates of US$2.42 according to LSEG data, helped by a 7% year-over-year increase in oil and gas volumes and operating cost cuts. Year-ago adjusted profit was US$3.05 per share.

"We also are taking steps to optimise our portfolio and reduce operating costs to deliver superior long-term value to shareholders," CEO Michael Wirth said in a statement.

Up to US$3 billion in cost savings are planned through 2026 from leveraging technology, asset sales and changing how and where work is performed, the company said.

Chevron has said it will move its headquarters to Texas from California, and open a new, nearly US$1-billion engineering centre in India

Savings are needed to boost returns. This year, share buybacks and dividends have outstripped earnings. The third quarter's US$4.5-billion profit was less than the US$7.7 billion spent on shareholder returns.

Pending sales of oil properties in Canada, Alaska and Congo will generate about US$8 billion in pre-tax proceeds. All three sales are expected to close this quarter, the company said.

Operating profits were down compared to a year ago in both its major units. Earnings from pumping oil and gas fell 20% to US$4.59 billion while profit from refining oil into gasoline and diesel tumbled 65%, to US$595 million.

Well maintenance and asset sales will reduce fourth-quarter oil and gas output by about 90,000 barrels per day, but the company remains on track for a roughly 7% year-over-year increase. A closely watched oil-expansion project in Kazakhstan is on track for initial start-up in the first quarter, the company said.

  - Reuters