The San Ramon, Calif.-based company said its third-quarter net income totaled $1.98 billion, or $2.02 per share — contrasted with a loss of $904 million, or 85 cents a share, in the write-off plagued third quarter of 2002.

Setting aside special charges and gains, profits at ChevronTexaco amounted to $1.86 per share for the three months that ended Sept. 30, well above analysts' average estimate of $1.62 per share, according to a survey by Thomson First Call.

Third-quarter revenue rose 22 percent to $31 billion.

The earnings report, released before the start of yesterday's trading, sent ChevronTexaco up $2.54, or 3.5 percent, to $74.30 on the New York Stock Exchange.

"They had a very good quarter," said Jacques Rousseau at Friedman Billings Ramsey, who rates the company's stock "underperform" and does not own any. "They've got very good exposure to refining in California, and that was a very good number this quarter."

Indeed, ChevronTexaco was among the biggest beneficiaries of a sharp price spike in mid-August, when pump prices in California rose 35.8 cents a gallon over 14 days. After subtracting the cost of the raw crude oil, ChevronTexaco said it received an average of $26.41 for every barrel of gasoline it produced in the West, up 61 percent from $16.36 in the year-ago period.

Experts attribute the August price run-up to extra-tight supplies that were exacerbated by several refinery outages and a broken fuel pipeline in Arizona. Still, high prices remained long after those factors were erased, and it took nine weeks for retail prices to recede to the levels from before the run-up.

Hawai'i prices, however, remain the highest in the nation. The statewide average price for a gallon of self-serve gasoline yesterday was $2.11, which was up from $1.766 a year ago, according to AAA travel club. The nationwide average was $1.536 a gallon, up from $1.461 a year ago.

Worldwide production of natural gas and oil declined more than 4 percent. ChevronTexaco said some of the decline is because of the loss of production at operations that have been sold or discontinued.

ChevronTexaco Chairman and Chief Executive Dave O'Reilly said the company — along with the rest of the industry — benefited from higher market prices for crude oil and natural gas. Compared to the third quarter last year, the company's average U.S. sale price for crude oil was up 10 percent, while the price for natural gas jumped 67 percent.

During the quarter, ChevronTexaco embarked on a worldwide reorganization of its refining and retail sales operations and took its first steps in a plan to sell about $2 billion in assets over the next few years. Those moves are intended to further streamline operations after the merger of Chevron Corp. and Texaco Inc. in October 2001.