Chevron Corporation ( CVX Quick Quote CVX - Free Report) reported adjusted fourth-quarter earnings per share of $2.56, missing the Zacks Consensus Estimate of $3.11 on weaker-than-expected performance from both segments. Precisely, income from the Upstream and the Downstream units totaled $5.2 billion and $760 million, respectively, below their Zacks Consensus Estimate of $5.3 billion and $1 billion. However, the energy major’s bottom line compared favorably with the year-earlier quarter's earnings of 16 cents on the back of sharply higher commodity prices. The outperformance can also be attributed to better-than-anticipated production volumes, which, at 3,117 thousand oil-equivalent barrels per day (MBOE/d), surpassed the consensus mark of 3,018 MBOE/d. In good news for investors, Chevron raised its quarterly dividend by 6% to $1.42 per share (or $5.68 per share annualized). The company generated revenues of $48.1 billion. The sales figure beat the Zacks Consensus Estimate of $45 billion and increased 91% year over year. Cash Flows, Capital Expenditure
The company recorded $9.5 billion in cash flow from operations, compared to just $2.3 billion a year ago. The soaring cash flow could be attributed to strong price realizations in the upstream business. Importantly, Chevron’s free cash flow for the quarter was a record $6.9 billion.
The company's cash flow for the full-year 2021 was $29.2 billion, up 175.5% from 2020. Further, Chevron paid $10.2 billion in dividends and bought back $1.4 billion worth of its shares. The Zacks Rank #3 (Hold) company spent $3.7 billion in capital and exploratory expenditures during the quarter, compared to the year-ago period’s $3.2 billion. Some 79% 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 Dec 31, the San Ramon, CA-based company had $5.6 billion in cash and cash equivalents and total debt of $31.4 billion with a debt-to-total capitalization of about 18.4%.
Strong Earnings Season for Energy
Chevron might have missed profit estimates but supportive industry fundamentals and the emerging multi-year commodity price upcycle have led to a good earnings season for
energy companies so far. Schlumberger ( SLB Quick Quote SLB - Free Report) , the leading player in the oilfield service space, reported fourth-quarter earnings of 41 cents per share (excluding charges and credits) that beat the Zacks Consensus Estimate of 39 cents. SLB’s quarterly earnings were aided by higher contributions from Europe/CIS/Africa, strong North America rig activity and increased well construction activities in the U.S. Gulf of Mexico. Fuel demand has improved drastically, so has oil price, owing to the roll-out of coronavirus vaccines at a massive scale. Schlumberger expects the trend to continue for the next few years, which will drive upstream investment, especially in international resources. SLB expects to capitalize on this positive trend. Smaller rival Halliburton ( HAL Quick Quote HAL - Free Report) also reported strong fourth-quarter earnings on the back of better-than-expected profit from its Drilling and Evaluation division. HAL reported adjusted net income per share of 36 cents, beating the Zacks Consensus Estimate of 34 cents. In more good news for investors, Halliburton raised its quarterly dividend by 167% to 12 cents per share (or 48 cents per share annualized). Further, as part of its ongoing commitment to debt reduction, HAL announced that it will partly redeem its $1 billion of senior notes due in 2025. Looking ahead, Chevron’s integrated peer ExxonMobil ( XOM Quick Quote XOM - Free Report) is set to benefit from the spike in crude and natural gas prices. For the to-be-reported quarter, the Zacks Consensus Estimate for the upstream segment is pegged at a profit of $5.3 billion, indicating a massive jump from the prior-year quarter’s income of $501 million. For ExxonMobil’s upstream segment, the massive improvement in commodity prices could have increased fourth-quarter 2021 earnings by up to $1.9 billion from the previous quarter’s levels. Per a recent filing, ExxonMobil expects that changes in the natural gas price will increase fourth-quarter earnings by $700 million to $1.1 billion. Moreover, changes in liquid prices will increase earnings by $400 million to $800 million. XOM’s upstream asset divestments, which involve the U.K. North Sea assets, could raise up to $500 million. ExxonMobil is set to release fourth-quarter results on Feb 1.