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Can Chevron (CVX) Deliver Another Strong Earnings Show in Q3?
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Chevron Corporation (CVX - Free Report) is set to release third-quarter results on Oct 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $5.10 per share on revenues of $59 billion.
Let’s delve into the factors that might have influenced the American energy biggie’s performance in the September quarter. But it’s worth taking a look at Chevron’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the San Ramon, CA-based integrated player beat the consensus on robust commodity prices and product margins, which propelled both CVX segments to a better-than-expected bottom line. Chevron had reported adjusted earnings per share of $5.82, eclipsing the Zacks Consensus Estimate by 80 cents. Revenues of $68.8 billion had also come in 23.2% above the consensus mark.
Chevron beat the Zacks Consensus Estimate in two of the last four quarters and missed in the others, which resulted in an earnings surprise of 7.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the first-quarter bottom line has been revised 0.8% upward in the last seven days. The estimated figure indicates a 72.3% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 31.9% increase from the year-ago period.
Factors to Consider
Chevron is expected to have benefited from the strength in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for the third-quarter average sales price for crude is pegged at $89 per barrel, up significantly from a year earlier when the company had fetched $58 in the United States and $68 overseas. Further, the Zacks Consensus Estimate for the third-quarter average sales price for natural gas is pegged at $10.32 per thousand cubic feet compared to $3.25 (U.S.) and $6.28 (international) in the corresponding period of 2021.
The year-over-year improvement in realizations has most likely buoyed Chevron’s upstream segment revenues and cash flows. As a matter of fact, for the to-be-reported quarter, the Zacks Consensus Estimate for the upstream unit is pegged at a profit of $8 billion, indicating a massive jump from the prior-year quarter’s income of $5.1 billion.
CVX is also expected to have reaped the reward of a better macro environment in its downstream (or refining) unit. With post-pandemic demand recovery driving margins higher, the company should see segment earnings surge year over year. Echoing Chevron’s healthy downstream dynamics, the Zacks Consensus Estimate for the to-be-reported quarter’s income is projected at $2.4 billion. The number suggests an overwhelming increase from the profit of $1.3 billion reported in the year-ago quarter.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Chevron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chevron has an Earnings ESP of +0.28% and a Zacks Rank #3.
Other Stocks to Consider
Chevron is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Murphy USA (MUSA - Free Report) has an Earnings ESP of +12.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 26.
For 2022, Murphy USA has a projected earnings growth rate of 69.6%. Valued at around $6.6 billion, MUSA has gained 60.6% in a year.
PBF Energy (PBF - Free Report) has an Earnings ESP of +10.30% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 27.
PBF topped the Zacks Consensus Estimate by an average of 78% in the trailing four quarters, including a 43.8% beat in Q2. PBF has gained 171.6% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +50% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 26.
The Zacks Consensus Estimate for OII’s 2022 earnings has been revised 33.3% upward over the past 60 days. Valued at around $1 billion, Oceaneering International has lost 34.8% in a year.
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Can Chevron (CVX) Deliver Another Strong Earnings Show in Q3?
Chevron Corporation (CVX - Free Report) is set to release third-quarter results on Oct 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $5.10 per share on revenues of $59 billion.
Let’s delve into the factors that might have influenced the American energy biggie’s performance in the September quarter. But it’s worth taking a look at Chevron’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the San Ramon, CA-based integrated player beat the consensus on robust commodity prices and product margins, which propelled both CVX segments to a better-than-expected bottom line. Chevron had reported adjusted earnings per share of $5.82, eclipsing the Zacks Consensus Estimate by 80 cents. Revenues of $68.8 billion had also come in 23.2% above the consensus mark.
Chevron beat the Zacks Consensus Estimate in two of the last four quarters and missed in the others, which resulted in an earnings surprise of 7.5%, on average. This is depicted in the graph below:
Chevron Corporation Price and EPS Surprise
Chevron Corporation price-eps-surprise | Chevron Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has been revised 0.8% upward in the last seven days. The estimated figure indicates a 72.3% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 31.9% increase from the year-ago period.
Factors to Consider
Chevron is expected to have benefited from the strength in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for the third-quarter average sales price for crude is pegged at $89 per barrel, up significantly from a year earlier when the company had fetched $58 in the United States and $68 overseas. Further, the Zacks Consensus Estimate for the third-quarter average sales price for natural gas is pegged at $10.32 per thousand cubic feet compared to $3.25 (U.S.) and $6.28 (international) in the corresponding period of 2021.
The year-over-year improvement in realizations has most likely buoyed Chevron’s upstream segment revenues and cash flows. As a matter of fact, for the to-be-reported quarter, the Zacks Consensus Estimate for the upstream unit is pegged at a profit of $8 billion, indicating a massive jump from the prior-year quarter’s income of $5.1 billion.
CVX is also expected to have reaped the reward of a better macro environment in its downstream (or refining) unit. With post-pandemic demand recovery driving margins higher, the company should see segment earnings surge year over year. Echoing Chevron’s healthy downstream dynamics, the Zacks Consensus Estimate for the to-be-reported quarter’s income is projected at $2.4 billion. The number suggests an overwhelming increase from the profit of $1.3 billion reported in the year-ago quarter.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Chevron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chevron has an Earnings ESP of +0.28% and a Zacks Rank #3.
Other Stocks to Consider
Chevron is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Murphy USA (MUSA - Free Report) has an Earnings ESP of +12.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 26.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Murphy USA has a projected earnings growth rate of 69.6%. Valued at around $6.6 billion, MUSA has gained 60.6% in a year.
PBF Energy (PBF - Free Report) has an Earnings ESP of +10.30% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 27.
PBF topped the Zacks Consensus Estimate by an average of 78% in the trailing four quarters, including a 43.8% beat in Q2. PBF has gained 171.6% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +50% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 26.
The Zacks Consensus Estimate for OII’s 2022 earnings has been revised 33.3% upward over the past 60 days. Valued at around $1 billion, Oceaneering International has lost 34.8% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.