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Chevron Corporation (CVX - Free Report) reported adjusted second-quarter earnings per share of $1.71, beating the Zacks Consensus Estimate of $1,54. Meanwhile, the company reported a loss of $1.56 per share in the year-ago period. The company follows peers ExxonMobil (XOM - Free Report) and Royal Dutch Shell in coming up with better-than-expected profits. Another supermajor, BP plc (BP - Free Report) will reveal quarterly numbers early next week.
Chevron’s earnings turnaround reflects higher oil prices and production, plus increase in refined products sales. This was complemented by the integrated energy major’s successful cost reduction initiatives, which allowed it to lower operating expenses and capital spending by 14% and 16%, respectively, from year-ago levels.
The company, which recently set up a ‘New Energies’ division to look after the alternate fuels business, generated revenue of $37.6 billion. The sales figure beat the Zacks Consensus Estimate of $35.6 billion and rocketed 178.6% year over year.
In more good news for investors, Chevron revived its stock repurchase program and vowed to buy back $2-$3 billion in shares annually starting from the third quarter.
Chevron Corporation Price, Consensus and EPS Surprise
Upstream: Chevron’s production of crude oil and natural gas increased 4.6% from the year-earlier level to 3,126 thousand oil-equivalent barrels per day/MBOE/d (59% liquids) and it was the third successive quarter where volumes topped 3 million barrels per day. The year-over-year rise reflects contribution from the Noble Energy acquisition and lower production curtailments.
The U.S. output was up 14.6% year over year to 1,136 MBOE/d but the company’s international operations (accounting for 64% of the total) edged down 0.4% to 1,990 MBOE/d.
Apart from higher production, Chevron also experienced a significant improvement in commodity prices. At $54 per barrel, Chevron’s average realized liquids prices in the United States were 184.2% above the year-earlier levels while prices overseas surged 195.2%.
The dual catalyst of increase in volumes and realizations meant that Chevron’s upstream segment recorded a profit of $3.2 billion in the second quarter of 2021, turning around from the $6.1 billion loss in the year-ago period when the energy sector was devastated by the pandemic-induced demand destruction and price plunge.
Downstream: Chevron’s downstream segment recorded a profit of $839 million, compared to last year’s loss of $1 billion. The rise primarily underlined higher product sales, improved earnings from its Chevron Phillips Chemical Company joint venture and stronger domestic margins.
Cash Flows, Capital Expenditure
The company recorded $7 billion in cash flow from operations, compared to a meagre $100 million a year ago. The soaring cash flow could be attributed to rebounding price realizations in the upstream business.
In the second quarter, Chevron paid $2.6 billion in dividends.
The Zacks Rank #3 (Hold) company spent $2.8 billion in capital and exploratory expenditures during the quarter, down from the year-ago period’s $3.3 billion. Some 83% of the total outlays pertained to upstream projects.
As of Jun 30, the San Ramon, CA-based company had $7.5 billion in cash and cash equivalents and total debt of $43 billion with a debt-to-total capitalization of about 24.4%.
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Chevron (CVX) Beats Q2 Earnings Estimates, Starts Buyback
Chevron Corporation (CVX - Free Report) reported adjusted second-quarter earnings per share of $1.71, beating the Zacks Consensus Estimate of $1,54. Meanwhile, the company reported a loss of $1.56 per share in the year-ago period. The company follows peers ExxonMobil (XOM - Free Report) and Royal Dutch Shell in coming up with better-than-expected profits. Another supermajor, BP plc (BP - Free Report) will reveal quarterly numbers early next week.
Chevron’s earnings turnaround reflects higher oil prices and production, plus increase in refined products sales. This was complemented by the integrated energy major’s successful cost reduction initiatives, which allowed it to lower operating expenses and capital spending by 14% and 16%, respectively, from year-ago levels.
The company, which recently set up a ‘New Energies’ division to look after the alternate fuels business, generated revenue of $37.6 billion. The sales figure beat the Zacks Consensus Estimate of $35.6 billion and rocketed 178.6% year over year.
In more good news for investors, Chevron revived its stock repurchase program and vowed to buy back $2-$3 billion in shares annually starting from the third quarter.
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 increased 4.6% from the year-earlier level to 3,126 thousand oil-equivalent barrels per day/MBOE/d (59% liquids) and it was the third successive quarter where volumes topped 3 million barrels per day. The year-over-year rise reflects contribution from the Noble Energy acquisition and lower production curtailments.
The U.S. output was up 14.6% year over year to 1,136 MBOE/d but the company’s international operations (accounting for 64% of the total) edged down 0.4% to 1,990 MBOE/d.
Apart from higher production, Chevron also experienced a significant improvement in commodity prices. At $54 per barrel, Chevron’s average realized liquids prices in the United States were 184.2% above the year-earlier levels while prices overseas surged 195.2%.
The dual catalyst of increase in volumes and realizations meant that Chevron’s upstream segment recorded a profit of $3.2 billion in the second quarter of 2021, turning around from the $6.1 billion loss in the year-ago period when the energy sector was devastated by the pandemic-induced demand destruction and price plunge.
Downstream: Chevron’s downstream segment recorded a profit of $839 million, compared to last year’s loss of $1 billion. The rise primarily underlined higher product sales, improved earnings from its Chevron Phillips Chemical Company joint venture and stronger domestic margins.
Cash Flows, Capital Expenditure
The company recorded $7 billion in cash flow from operations, compared to a meagre $100 million a year ago. The soaring cash flow could be attributed to rebounding price realizations in the upstream business.
In the second quarter, Chevron paid $2.6 billion in dividends.
The Zacks Rank #3 (Hold) company spent $2.8 billion in capital and exploratory expenditures during the quarter, down from the year-ago period’s $3.3 billion. Some 83% 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 Jun 30, the San Ramon, CA-based company had $7.5 billion in cash and cash equivalents and total debt of $43 billion with a debt-to-total capitalization of about 24.4%.