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Chevron (CVX) Q1 Earnings Miss Estimates, Revenues Beat

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Chevron Corporation (CVX - Free Report) reported adjusted first-quarter earnings per share of 90 cents, missing the Zacks Consensus Estimate of 92 cents. Meanwhile, the company earned $1.31 per share in the year-ago period. Chevron’s underperformance contrasts with peers ExxonMobil (XOM - Free Report) , Royal Dutch Shell (RDS.A - Free Report) and BP plc (BP - Free Report) all of whom posted better-than-expected profit.  

Chevron’s earnings disappointment reflects lower production, plus decline in refined products margins. This was partly offset by the integrated energy major’s successful cost reduction initiatives, which allowed it to reduce capital spending by 43% from year-ago levels.  

The company generated revenue of $32 billion. The sales figure beat the Zacks Consensus Estimate of $30.9 billion and was up 1.7% year over year on the back of higher commodity prices.

In good news for investors, Chevron raised its quarterly dividend by 3.9% to $1.34 per share (or $5.36 per share annualized) a day before the earnings release. The new payout is to be paid out on Jun 10 to shareholders of record as of May 19.

Chevron Corporation Price, Consensus and EPS Surprise

Chevron Corporation Price, Consensus and EPS Surprise

Chevron Corporation price-consensus-eps-surprise-chart | Chevron Corporation Quote


Segment Performance

Upstream: Chevron’s production of crude oil and natural gas decreased 3.5% from the year-earlier level to 3,121 thousand oil-equivalent barrels per day/MBOE/d (58.5% liquids) but it was the second successive quarter where volumes topped 3 million barrels per day.

The year-over-year fall reflects losses due to divestments and natural declines, output curtailment in reaction to last year’s coronavirus-induced commodity price collapse, absence of Venezuela production, maintenance-related downturn at the Gorgon LNG project in Australia plus impact from the winter storm Uri, which were partly offset by contribution from the Noble Energy acquisition.

The U.S. output edged up 1% year over year to 1,075 MBOE/d but the company’s international operations (accounting for 66% of the total) was down 5.8% to 2,046 MBOE/d.

Pulled down by the dip in volumes, Chevron’s upstream segment recorded a profit of $2.4 billion in the first quarter of 2021, compared to the $2.9 billion in the year-ago period. The negative production effect was partly offset by gain in realizations.

At $48 per barrel, Chevron’s average realized liquids prices in the U.S. were 29.7% above the year-earlier levels while prices overseas were up 30.2%.

Downstream: Chevron’s downstream segment recorded a paltry profit of $5 million, compared to last year’s income of $1.1 billion. The plunge primarily underlined a fall in refined products sales margins.

Cash Flows, Capital Expenditure

The company recorded $4.2 billion in cash flow from operations, down from $4.7 billion a year ago. In the first quarter, Chevron paid $2.5 billion in dividends.

The Zacks Rank #3 (Hold) company spent $2.5 billion in capital and exploratory expenditures during the quarter, down significantly from the year-ago period’s $4.4 billion. More than 84% of the total outlays pertained to upstream projects.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Balance Sheet

As of Mar 31, the San Ramon, CA-based company had $7.1 billion in cash and cash equivalents and total debt of $45.4 billion with a debt-to-total capitalization of about 25.6%.

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