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Why Is Chevron (CVX) Up 0.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Chevron (CVX - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chevron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Chevron Q1 Earnings Top on Production Gains
Chevron reported better-than-expected first-quarter earnings, boosted by production gains. The U.S. energy major reported earnings per share of $1.39, ahead of the Zacks Consensus Estimate of $1.26.
However, the company’s bottom line fell from the year-ago profit of $1.90 on lower crude price realizations and drop in profits in its downstream business, which refines crude oil into fuels like gasoline and diesel oil.
Quarterly revenue of $35.2 billion missed the Zacks Consensus Estimate of $37.9 billion and was down 6.8% year over year.
Segment Performance
Upstream: Chevron’s total production of crude oil and natural gas increased 6.5% compared with last year’s corresponding period to 3,038 thousand oil-equivalent barrels per day (MBOE/d) – the second successive quarter where volumes exceeded 3 million barrels per day. The U.S. output rose 21% year over year to 884 MBOE/d while the company’s international operations (accounting for 71% of the total) increased 1.7% to 2,154 MBOE/d.
Apart from the shale assets in the prolific Permian Basin, the strong output could be attributed to contribution from its Wheatstone LNG development in Australia.
However, the rise in production was offset by lower oil realizations, the result being a 6.8% fall in Chevron’s upstream segment profit – from $3.4 billion in the year-earlier quarter to $3.1 billion.
Downstream: Chevron’s downstream segment achieved earnings of $252 million, 65.4% lower than the profit of $728 million last year. The decline primarily underlined a fall in refined products sales margins.
Cash Flows, Capital Expenditure
Importantly, the company delivered a solid cash flow performance this quarter – an important gauge for the oil and gas industry – with $5.1 billion in cash flow from operations, up marginally from $5 billion a year ago.
The company spent $4.7 billion in capital expenditures during the quarter, up from the year-ago period’s $4.4 billion. Roughly 89% of the total outlays pertained to upstream projects.
Balance Sheet
As of Mar 31, 2019, the San Ramon, CA-based company had $8.7 billion in cash and cash equivalents and total debt of $33.1 billion, with a debt-to-total capitalization ratio of about 17.6%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 8.08% due to these changes.
VGM Scores
Currently, Chevron has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Chevron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Chevron (CVX) Up 0.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Chevron (CVX - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chevron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Chevron Q1 Earnings Top on Production Gains
Chevron reported better-than-expected first-quarter earnings, boosted by production gains. The U.S. energy major reported earnings per share of $1.39, ahead of the Zacks Consensus Estimate of $1.26.
However, the company’s bottom line fell from the year-ago profit of $1.90 on lower crude price realizations and drop in profits in its downstream business, which refines crude oil into fuels like gasoline and diesel oil.
Quarterly revenue of $35.2 billion missed the Zacks Consensus Estimate of $37.9 billion and was down 6.8% year over year.
Segment Performance
Upstream: Chevron’s total production of crude oil and natural gas increased 6.5% compared with last year’s corresponding period to 3,038 thousand oil-equivalent barrels per day (MBOE/d) – the second successive quarter where volumes exceeded 3 million barrels per day. The U.S. output rose 21% year over year to 884 MBOE/d while the company’s international operations (accounting for 71% of the total) increased 1.7% to 2,154 MBOE/d.
Apart from the shale assets in the prolific Permian Basin, the strong output could be attributed to contribution from its Wheatstone LNG development in Australia.
However, the rise in production was offset by lower oil realizations, the result being a 6.8% fall in Chevron’s upstream segment profit – from $3.4 billion in the year-earlier quarter to $3.1 billion.
Downstream: Chevron’s downstream segment achieved earnings of $252 million, 65.4% lower than the profit of $728 million last year. The decline primarily underlined a fall in refined products sales margins.
Cash Flows, Capital Expenditure
Importantly, the company delivered a solid cash flow performance this quarter – an important gauge for the oil and gas industry – with $5.1 billion in cash flow from operations, up marginally from $5 billion a year ago.
The company spent $4.7 billion in capital expenditures during the quarter, up from the year-ago period’s $4.4 billion. Roughly 89% of the total outlays pertained to upstream projects.
Balance Sheet
As of Mar 31, 2019, the San Ramon, CA-based company had $8.7 billion in cash and cash equivalents and total debt of $33.1 billion, with a debt-to-total capitalization ratio of about 17.6%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 8.08% due to these changes.
VGM Scores
Currently, Chevron has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Chevron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.