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Chevron (CVX) Down 5.5% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Chevron Corporation (CVX - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter 2016 Results
Chevron reported weak fourth quarter results, dragged down by lower refining margins. The company reported earnings per share of $0.22, sharply lower than the Zacks Consensus Estimate of $0.63.
However, the bottom line compared favorably with the year-ago loss of $0.31 amid the recovery in commodity prices and the success of its cost savings initiatives.
Quarterly revenue of $31,497 million missed the Zacks Consensus Estimate of $32,605.8 million but were up 8% year over year.
Segment Performance
Upstream: Chevron’s total production of crude oil and natural gas remained essentially unchanged from the year-earlier level at 2,669 thousand oil-equivalent barrels per day (MBOE/d). The U.S. output decreased 5% year over year to 682 MBOE/d, while the company’s international operations (accounting for 74% of the total) was up 2% to 1,987 MBOE/d.
Contribution from volume increases from showpiece projects, shale assets and base business were offset by normal field declines, the effect of asset sales, production entitlement effects in different regions and disruptions in its Nigerian operations.
Despite flat production volumes, Chevron’s upstream segment had a massive turnaround – from a loss of $1,361 million in the year-earlier quarter to a profit of $930 million. This was mainly on account of a leaner cost structure and higher realizations.
Meanwhile, Chevron’s production outlook remains one of the most robust in its peer group, with a number of major initiatives scheduled to come online during the next few years. Major start-ups during 2016 include the Chuandongbei Project in China and the Gorgon natural gas project in Australia.
Downstream: Chevron’s downstream segment achieved earnings of $357 million, 65% lower than the profit of $1,011 million last year. The results were dragged down by lower margins on refined product sales.
Costs & Expenses
Exploration costs nosedived from $1,358 million in the fourth quarter of 2015 to $191 million. The company spent $5,261 million in capital expenditures during the quarter, a considerable decline from the $8,707 million incurred a year ago. Approximately 85% of the total outlays pertained to upstream projects. Full-year spending totaled $22.4 billion as against $34 billion in 2015.
Balance Sheet
As of Dec 31, 2016, the company had $6,988 million in cash and total debt of $46,126 million, with a debt-to-total capitalization ratio of about 24.1%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. While looking back an additional 30 days, we can see even more downward momentum. There have two downward revisions in the last two months.
At this time, Chevron's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Chevron (CVX) Down 5.5% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Chevron Corporation (CVX - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter 2016 Results
Chevron reported weak fourth quarter results, dragged down by lower refining margins. The company reported earnings per share of $0.22, sharply lower than the Zacks Consensus Estimate of $0.63.
However, the bottom line compared favorably with the year-ago loss of $0.31 amid the recovery in commodity prices and the success of its cost savings initiatives.
Quarterly revenue of $31,497 million missed the Zacks Consensus Estimate of $32,605.8 million but were up 8% year over year.
Segment Performance
Upstream: Chevron’s total production of crude oil and natural gas remained essentially unchanged from the year-earlier level at 2,669 thousand oil-equivalent barrels per day (MBOE/d). The U.S. output decreased 5% year over year to 682 MBOE/d, while the company’s international operations (accounting for 74% of the total) was up 2% to 1,987 MBOE/d.
Contribution from volume increases from showpiece projects, shale assets and base business were offset by normal field declines, the effect of asset sales, production entitlement effects in different regions and disruptions in its Nigerian operations.
Despite flat production volumes, Chevron’s upstream segment had a massive turnaround – from a loss of $1,361 million in the year-earlier quarter to a profit of $930 million. This was mainly on account of a leaner cost structure and higher realizations.
Meanwhile, Chevron’s production outlook remains one of the most robust in its peer group, with a number of major initiatives scheduled to come online during the next few years. Major start-ups during 2016 include the Chuandongbei Project in China and the Gorgon natural gas project in Australia.
Downstream: Chevron’s downstream segment achieved earnings of $357 million, 65% lower than the profit of $1,011 million last year. The results were dragged down by lower margins on refined product sales.
Costs & Expenses
Exploration costs nosedived from $1,358 million in the fourth quarter of 2015 to $191 million. The company spent $5,261 million in capital expenditures during the quarter, a considerable decline from the $8,707 million incurred a year ago. Approximately 85% of the total outlays pertained to upstream projects. Full-year spending totaled $22.4 billion as against $34 billion in 2015.
Balance Sheet
As of Dec 31, 2016, the company had $6,988 million in cash and total debt of $46,126 million, with a debt-to-total capitalization ratio of about 24.1%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. While looking back an additional 30 days, we can see even more downward momentum. There have two downward revisions in the last two months.
Chevron Corporation Price and Consensus
Chevron Corporation Price and Consensus | Chevron Corporation Quote
VGM Scores
At this time, Chevron's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.