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Chevron Corp Beats on Earnings and Revenue in First Quarter

- By Alberto Abaterusso

Chevron Corp. (CVX) reported a first-quarter profit of $2.7 billion, or $1.41 per share, a turnaround from a loss of $725 million, or 39 cents per share, in the same period of 2016.

The U.S. energy stock beats analysts' expectations on EPS by 53 cents since analysts forecasted a first quarter 2017 EPS of 86 cents on average, ranging between a low of 71 cents and a high of $1.13.

Source: Yahoo Finance

The reversal in the quarterly bottom line was a result of improved revenues and cost cuts compared to the quarter of the previous year. The U.S. international energy corporation headquartered in San Ramon in California, closed the first quarter of 2017 with revenues coming in at $33.42 billion, a 41.9% increase on a year over year basis.

Also helped by rising crude oil prices, Chevron Corporation beats analysts' expectations on revenues by $120 million who forecasted that revenue would have come in at $33.3 billion. The latter figure was an average of five estimates from analysts who were surveyed on Chevron Corporation's first quarter 2017 revenues.

Source: Yahoo Finance

First quarter 2017 revenue also benefitted from proceeds of $600 million that came from the sale of an upstream asset in Indonesia.

In the first-quarter, from U.S. upstream operations Chevron Corporation earned $80 million, up 109.4% year over year. In the comparable period of one year ago the U.S. international energy company reported a loss of $850 million. While from international upstream operations the company reversed earnings to $1.437 in the first quarter of 2017 from a loss of $609 million in the same quarter one year ago.

Concerning U.S. downstream operations, Chevron Corporation reported an increase by nearly 90% to $469 million in the first quarter of 2017 from $247 million in the comparable period one year ago. While from the international downstream ones, the company earned $457 million, a 6.4% decline on a year over year basis.

In the first quarter of 2017, the company's total net oil-equivalent production was 2.676 billion of barrels per day, worldwide, versus 2.666 billion of daily barrels produced in the first quarter of 2016. The U.S. production contributed for 25.1% to the company's total production, while internationally the net oil-equivalent production was approximately 74.9% of the total.

The company generated cash flow of approximately $3.9 billion from operation, an impressive 240% increase from the figure of one year ago when Chevron Corporation reported $1.141 billion in cash flow from operations.

As of March 31, 2016, Chevron Corporation has approximately $6.994 billion in cash on hand and securities, flat from the previous quarter, $259.111 billion in assets and $45.256 billion in debt.

Chevron Corporation closed at $106.70 per share yesterday, up $1.23 or plus 1.17% from the previous trading day with a volume of 6,848,413 shares traded on the New York Stock Exchange versus an average volume of 5.69 million shares traded over the last 10 trading days.

The analysts' average target price per share is $126.32 which represents an 18.4% upside from the current share price. The target price ranges between a low $105 and a high of $147. The recommendation rating is 2.1 out of 5.

During the first quarter of 2017, Ken Fisher (Trades, Portfolio) increased his position in Chevron Corporation by 0.99% to 3,651,370 shares.

Disclosure: I have no positions in Chevron Corporation.

This article first appeared on GuruFocus.