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What's in the Cards for Chevron (CVX) This Earnings Season?
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Chevron Corporation (CVX - Free Report) is scheduled to release second-quarter 2020 results on July 31, before the opening bell.
The current Zacks Consensus Estimate for the to-be-reported quarter’s loss is pegged at 93 cents per share and the same for revenues stands at $19.47 billion.
Against this backdrop, let’s consider the factors that are likely to impact the company’s June-quarter results.
Factors at Play
Chevron's cost-reduction efforts have been encouraging enough. In view of the historic oil market crash and the coronavirus-induced weak demand for the commodity, Chevron expects to spend $14 billion for the ongoing year, indicating a further guidance cut from the previously lowered projection of $16 billion. The current estimate implies a 30% reduction from the initial forecast of $20 billion. The company is also targeting $1 billion in operating cost cuts. All these strategic moves are expected to have driven second-quarter earnings and cash flows higher.
However, the positive effect of cost savings is likely to have been offset by lower realized commodity prices. By now, we are aware that the oil price has been under continuous pressure ever since the coronavirus hit global energy demand hard. As a result, the outlook for all industries in the energy sector seems dull. Per the U.S. Energy Information Administration, WTI prices started the second quarter of 2019 at $61.59 per barrel and exited the same period at $58.47. In 2020, at the outset of the comparable quarter, prices were at $20.31 a barrel but later rose to $39.27 at June-end. The year-over-year fall in realizations is expected to have affected Chevron’s upstream earnings in the quarter under review. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings from the upstream segment is pegged at a loss of $1.1 billion. Meanwhile, the year-ago quarter recorded a profit of $3.5 billion.
What Does Our Model Say?
The proven Zacks model does not conclusively predict 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 a positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Chevron has an Earnings ESP of 0.00%.
Chevron delivered adjusted first-quarter earnings per share of $1.29, above the Zacks Consensus Estimate of 64 cents. This beat was driven by strong production from the Permian Basin and higher margins of refined products. However, the bottom line declined from the year-earlier quarter's earnings of $1.39 per share due to lower oil and natural gas price realizations.
The company generated revenues worth $31.5 billion, which beat the Zacks Consensus Estimate of $29.9 billion but the top line was down 10.5% year over year.
As far as earnings surprises are concerned, this San Ramon, CA-based Chevron boasts an excellent record, having surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 35.39%. This is depicted in the graph below:
While earnings outperformance looks uncertain for Chevron, here are some firms worth considering from the energy space on the basis of our model, which shows that these have the perfect combination of ingredients to deliver a positive surprise this reporting cycle:
TechnipFMCplc (FTI - Free Report) has an Earnings ESP of +8.26% and is Zacks #3 Ranked at present. The company is scheduled to release earnings on Jul 29.
Helmerich Payne, Inc. (HP - Free Report) has an Earnings ESP of +2.03% and is presently a #3 Ranked player. The firm is scheduled to release earnings on Jul 29.
Oceaneering International, Inc. (OII - Free Report) has an Earnings ESP of +26.39% and a Zacks Rank #3, currently. The company is scheduled to release earnings on Jul 29.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
What's in the Cards for Chevron (CVX) This Earnings Season?
Chevron Corporation (CVX - Free Report) is scheduled to release second-quarter 2020 results on July 31, before the opening bell.
The current Zacks Consensus Estimate for the to-be-reported quarter’s loss is pegged at 93 cents per share and the same for revenues stands at $19.47 billion.
Against this backdrop, let’s consider the factors that are likely to impact the company’s June-quarter results.
Factors at Play
Chevron's cost-reduction efforts have been encouraging enough. In view of the historic oil market crash and the coronavirus-induced weak demand for the commodity, Chevron expects to spend $14 billion for the ongoing year, indicating a further guidance cut from the previously lowered projection of $16 billion. The current estimate implies a 30% reduction from the initial forecast of $20 billion. The company is also targeting $1 billion in operating cost cuts. All these strategic moves are expected to have driven second-quarter earnings and cash flows higher.
However, the positive effect of cost savings is likely to have been offset by lower realized commodity prices. By now, we are aware that the oil price has been under continuous pressure ever since the coronavirus hit global energy demand hard. As a result, the outlook for all industries in the energy sector seems dull. Per the U.S. Energy Information Administration, WTI prices started the second quarter of 2019 at $61.59 per barrel and exited the same period at $58.47. In 2020, at the outset of the comparable quarter, prices were at $20.31 a barrel but later rose to $39.27 at June-end. The year-over-year fall in realizations is expected to have affected Chevron’s upstream earnings in the quarter under review. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings from the upstream segment is pegged at a loss of $1.1 billion. Meanwhile, the year-ago quarter recorded a profit of $3.5 billion.
What Does Our Model Say?
The proven Zacks model does not conclusively predict 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 a positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Chevron has an Earnings ESP of 0.00%.
Zacks Rank: Chevron sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highlights of Q1 Earnings & Surprise History
Chevron delivered adjusted first-quarter earnings per share of $1.29, above the Zacks Consensus Estimate of 64 cents. This beat was driven by strong production from the Permian Basin and higher margins of refined products. However, the bottom line declined from the year-earlier quarter's earnings of $1.39 per share due to lower oil and natural gas price realizations.
The company generated revenues worth $31.5 billion, which beat the Zacks Consensus Estimate of $29.9 billion but the top line was down 10.5% year over year.
As far as earnings surprises are concerned, this San Ramon, CA-based Chevron boasts an excellent record, having surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 35.39%. This is depicted in the graph below:
Chevron Corporation Price and EPS Surprise
Chevron Corporation price-eps-surprise | Chevron Corporation Quote
Stocks to Consider
While earnings outperformance looks uncertain for Chevron, here are some firms worth considering from the energy space on the basis of our model, which shows that these have the perfect combination of ingredients to deliver a positive surprise this reporting cycle:
TechnipFMCplc (FTI - Free Report) has an Earnings ESP of +8.26% and is Zacks #3 Ranked at present. The company is scheduled to release earnings on Jul 29.
Helmerich Payne, Inc. (HP - Free Report) has an Earnings ESP of +2.03% and is presently a #3 Ranked player. The firm is scheduled to release earnings on Jul 29.
Oceaneering International, Inc. (OII - Free Report) has an Earnings ESP of +26.39% and a Zacks Rank #3, currently. The company is scheduled to release earnings on Jul 29.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>