Zinger Key Points
- Chevron’s Q3 revenue rose to $50.67B, beating expectations with a 7% increase in production.
- Adjusted EPS hit $2.51, above consensus, with $7.7B returned to shareholders via dividends and buybacks.
- Discover Fast-Growing Stocks Every Month
Oil giant Chevron Corp CVX shares are trading higher after the company reported third-quarter results.
Revenues and other income of $50.669 billion beat the consensus of $48.986 billion.
Worldwide net oil-equivalent production rose 7% year over year to 3,364 MBOED, led by the acquisition of PDC Energy and strong production in the Permian Basin.
Adjusted net earnings were $4.53 billion, with adjusted EPS being $2.51 (down from $3.05 a year ago) in the quarter, surpassing the consensus of $2.43.
Third-quarter earnings fell due to reduced margins on refined product sales, the lack of favorable tax items from the previous year, and lower realizations.
U.S. Upstream reported earnings of $1.946 billion versus $2.074 billion a year ago. The decrease in earnings was due to lower realizations and higher depreciation, depletion, and amortization.
International upstream earnings fell to $2.643 billion from $3.681 billion a year ago due to the lack of favorable tax effects from the prior year and absence of prior year favorable foreign currency effects.
U.S. downstream earnings declined to $146 million from $1.376 billion due to reduced margins on refined product sales.
International downstream earnings rose to $449 million from $307 million the prior year quarter, on higher margins on refined product sales.
Operating cash flow totaled $9.7 billion, flat year-over-year, as higher dividends from equity affiliates and favorable working capital impact were offset by weak earnings and a one-time payment for ceased operations.
CVX returned $7.7 billion of cash to shareholders during the quarter, including dividends of $2.9 billion and share repurchases of $4.7 billion.
CVX held cash and equivalents of $4.699 billion as of September-end.
Dividend: The company declared a quarterly dividend of $1.63 per share, payable on December 10, to shareholders of record as of November 18, 2024.
Mike Wirth, Chevron’s chairman and chief executive officer, said, “Chevron started up key projects in Anchor, Jack/St. Malo and Tahiti fields this quarter. These projects, combined with additional project start-ups through 2025, are expected to grow U.S. Gulf of Mexico production to 300,000 barrels of net oil-equivalent per day by 2026.”
“Additionally, cost reduction efforts are underway, and the company is targeting $2-3 billion of structural cost reductions from 2024 by the end of 2026.”
This month, Chevron’s subsidiary penned a deal to sell a stake in several projects and assets to Canadian Natural Resources for $6.5 billion in cash.
This sale is part of Chevron’s plan to divest $10 billion-$15 billion in assets by 2028 to streamline its global energy portfolio.
Investors can gain exposure to CVX via EA Series Trust Strive U.S. Energy ETF DRLL and Westwood Salient Enhanced Energy Income ETF WEEI.
Price Action: CVX shares are up 2.07% at $151.90 premarket at the last check Friday.
Image via Shutterstock
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