Chevron's (CVX) Q3 Earnings Disappoint, Revenues Beat
Chevron Corporation CVX reported adjusted third-quarter earnings per share of $3.05, which missed the Zacks Consensus Estimate of $3.68. The bottom line declined from the year-ago quarter's level of $5.56. The underperformance could be attributed to lower-than-expected bottom-line results in the company’s downstream segments. CVX's downstream earnings missed the Zacks Consensus Estimate by 12.3%.
The company generated revenues of $54.1 billion, which beat the Zacks Consensus Estimate of $54 billion. The top line, however, declined 18.9% year over year due to lower production and oil prices.
Chevron Corporation Price, Consensus and EPS Surprise
Chevron Corporation price-consensus-eps-surprise-chart | Chevron Corporation Quote
Segment Performance
Upstream: The segment reported crude oil and natural gas production of 3,146 MBOE/d, up 3.9% year over year. The latest volume statistics primarily reflect an impressive output from the Permian basin — America's hottest and lowest-cost shale region. Worldwide net oil-equivalent production increased due to the acquisition of PDC Energy, Inc.
The U.S. output increased 19.6% year over year to a record 1,407 MBOE/d, while the company’s international operations (accounting for 55% of the total production) came down 6.1% to 1,739 MBOE/d.
Despite volumes improving from the previous year’s level, Chevron’s third-quarter 2023 Upstream segment profit decreased 38.2% to $5.7 billion. This was mainly on account of a sharp drop in oil and natural gas prices.
At $62 per barrel, Chevron’s average realized liquids prices in the United States were $14 below the year-earlier levels and the same declined 14.6% to $76 per barrel in the international markets. As far as natural gas is concerned, the commodity was down 80.3% and 32.8% in the United States and international markets, respectively.
Downstream: This segment recorded a profit of $1.7 billion, down from the prior-year quarter’s figure of $2.5 billion. This deterioration underlined lower margins on refined product sales and lower foreign currency effects.
Cash Flows, Capital Expenditure
The company recorded $9.7 billion in cash flow from operations compared with $15.3 billion a year ago. Chevron’s free cash flow for the quarter totaled $5 billion.
Further, Chevron paid $2.9 billion in dividends and bought back shares worth $3.4 billion. Due to restrictions related to the acquisition of PDC Energy, share repurchases were lower than in the previous quarter.
The company spent around $4.7 billion in capital and exploratory expenditures during the quarter compared with $3 billion in the year-ago period.
Balance Sheet
As of Sep 30, the San Ramon, CA-based company had $5.8 billion in cash and cash equivalents. It had a total debt of $20.6 billion with a debt-to-total capitalization of about 11.1%.
Zacks Rank and Other Key Picks
Currently, CVX carries a Zacks Rank #2 (Buy).
Investors interested in the energy sector might look at some other top-ranked stocks like CVR Energy CVI and USA Compression Partners USAC, each sporting a Zacks Rank #1 (Strong Buy), and Harbour Energy HBRIY, carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.13 billion. In the past year, its shares have lost 22.6%.
CVI currently pays a dividend of $2 per share or 6.42% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is valued at around $2.47 billion. USAC currently pays a dividend of $2.10 per unit, or 8.35% on an annual basis.
USAC provides natural gas compression services and offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
Harbour Energy is worth approximately $2.30 billion. HBRIY currently pays a dividend of 21 cents per share, or 6.69% on an annual basis.
The company's activities include acquiring, exploring, developing, and producing oil and gas reserves. It has ownership stakes in several properties in the United Kingdom, Norway, Indonesia, Vietnam and Mexico.
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Chevron Corporation (CVX) : Free Stock Analysis Report
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