ChevronTexaco, the second largest North American oil group, has said that second quarter earnings fell by eighty one percent after energy prices slumped and a $531 million reduction in the value of its investment in Dynegy.
Net income declined to $407 million, or 39 cents a share, compared with estimated combined earnings of $2.11 billion, or $1.99, in the year-ago quarter, the company said in a statement. Revenue fell by almost a sixth to $25.3 billion from $29.7 billion.
ChevronTexaco, created from Chevron's $45.8 billion purchase of Texaco last year, slashed the value of its 27 percent stake in Dynegy after shares of the energy trader tumbled. The San Francisco-based company also made less money producing energy as natural-gas prices dropped by in the US market by 22 percent.
“Dynegy continues to be a problem,” said Tim Ghriskey, a fund manager with Ghriskey Capital, ”Trying to prop up Dynegy in this environment isn't the best strategy.”