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Chevron Q3 Earnings Beat on Record Permian Basin Production
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Chevron Corporation (CVX - Free Report) reported adjusted third-quarter earnings per share of $2.51, beating the Zacks Consensus Estimate of $2.47. The outperformance stemmed from higher-than-expected U.S. production in the company’s key upstream segment, as volume from the Permian Basin reached an all-time high. The unit’s domestic output of 1,605 thousand oil-equivalent barrels per day (MBOE/d) came in slightly above the consensus mark of 1,602 MBOE/d.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
However, the company’s bottom line fell from the year-ago adjusted profit of $3.05 due to weaker oil price realizations, plus a dip in domestic refined product sales margins.
The company generated revenue of $50.7 billion. The sales figure beat the Zacks Consensus Estimate of $49.9 billion but decreased 6.3% year over year.
Chevron Corporation Price, Consensus and EPS Surprise
Upstream: Chevron’s production of crude oil and natural gas — at 3,364 MBOE/d (59% liquids) — rose 6.9% year over year. The latest volume statistics primarily reflect contribution from the PDC Energy acquisition, key project start-ups in the Gulf of Mexico and record output from the Permian basin — America's hottest and lowest-cost shale region.
The U.S. output surged 14.1% year over year to 1,605 MBOE/d while the company’s international operations (accounting for 52% of the total) edged up 1.2% to 1,759 MBOE/d.
Despite volumes improving from last year, Chevron’s third-quarter 2024 upstream segment profit fell 20.3% to $4.6 billion. This was primarily due to a decline in U.S. oil and natural gas prices.
At $54.86 per barrel, Chevron’s average realized liquids prices in the U.S. were 12.1% below the year-earlier levels, while prices overseas decreased 6.7% to $70.59 per barrel. As far as natural gas is concerned, the commodity was down 60.4% and up 7.2%, respectively in the U.S. and internationally.
Downstream: Chevron’s downstream segment recorded a profit of $595 million, plunging from last year’s figure of $1.7 billion. The slip underlined lower product sales margins in the U.S. and higher operating expenses overseas.
Cash Flows, Capital Expenditure
The company recorded $9.7 billion in cash flow from operations, same as the year-ago period as a drop in earnings and a one-time outgo was somewhat offset by higher dividends from equity affiliates and lower working capital. Chevron’s free cash flow for the quarter was $5.6 billion.
Further, Chevron paid $2.9 billion in dividends and bought back $4.7 billion worth of its shares.
The Zacks Rank #5 (Strong Sell) company spent around $4.1 billion in capital and exploratory expenditures during the quarter, compared to the year-ago period’s $4.7 billion.
As of Sept. 30, the only energy component of the Dow Jones Industrial Average had $4.7 billion in cash and cash equivalents and total debt of $25.8 billion with a debt-to-total capitalization of about 14.2%.
Important Energy Earnings So Far
While we have discussed Chevron third-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie SLB (SLB - Free Report) reported third-quarter 2024 adjusted earnings per share of 89 cents, a penny ahead of the Zacks Consensus Estimate and above the year-ago quarter profit of 78 cents. The robust numbers reflect broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions, and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.8 billion in the third quarter. As of Sept. 30, 2024, the company had approximately $4.5 billion in cash and short-term investments. It registered a long-term debt of $11.9 billion at the end of the quarter.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported third-quarter 2024 adjusted earnings of $1.14 per share, which missed the Zacks Consensus Estimate of $1.29 due to the significant decline in refining throughput volumes. Adjusted operating income in the Refining segment totaled $565 million, down from $3.4 billion in the year-ago quarter. The figure also missed our estimate of $1.8 billion.
Valero’s total cost of sales decreased to $32.1 billion from the year-ago figure of $34.6 billion. The figure is also below our estimate of $33 billion, primarily due to lower cost of materials and operating expenses. The third-quarter capital investment totaled $429 million, of which $338 million was allotted for sustaining the business.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported third-quarter adjusted earnings per share of 25 cents, compared to the Zacks Consensus Estimate of 27 cents. The bottom line was dragged down by lower contributions from the Products Pipelines and CO2 business segments. KMI’s third-quarter DCF was $1.1 billion, essentially same as a year ago.
As of Sept. 30, 2024, Kinder Morgan reported $108 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For full-year 2024 KMI still anticipates a DCF of $5 billion and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Chevron Q3 Earnings Beat on Record Permian Basin Production
Chevron Corporation (CVX - Free Report) reported adjusted third-quarter earnings per share of $2.51, beating the Zacks Consensus Estimate of $2.47. The outperformance stemmed from higher-than-expected U.S. production in the company’s key upstream segment, as volume from the Permian Basin reached an all-time high. The unit’s domestic output of 1,605 thousand oil-equivalent barrels per day (MBOE/d) came in slightly above the consensus mark of 1,602 MBOE/d.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
However, the company’s bottom line fell from the year-ago adjusted profit of $3.05 due to weaker oil price realizations, plus a dip in domestic refined product sales margins.
The company generated revenue of $50.7 billion. The sales figure beat the Zacks Consensus Estimate of $49.9 billion but decreased 6.3% year over year.
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 — at 3,364 MBOE/d (59% liquids) — rose 6.9% year over year. The latest volume statistics primarily reflect contribution from the PDC Energy acquisition, key project start-ups in the Gulf of Mexico and record output from the Permian basin — America's hottest and lowest-cost shale region.
The U.S. output surged 14.1% year over year to 1,605 MBOE/d while the company’s international operations (accounting for 52% of the total) edged up 1.2% to 1,759 MBOE/d.
Despite volumes improving from last year, Chevron’s third-quarter 2024 upstream segment profit fell 20.3% to $4.6 billion. This was primarily due to a decline in U.S. oil and natural gas prices.
At $54.86 per barrel, Chevron’s average realized liquids prices in the U.S. were 12.1% below the year-earlier levels, while prices overseas decreased 6.7% to $70.59 per barrel. As far as natural gas is concerned, the commodity was down 60.4% and up 7.2%, respectively in the U.S. and internationally.
Downstream: Chevron’s downstream segment recorded a profit of $595 million, plunging from last year’s figure of $1.7 billion. The slip underlined lower product sales margins in the U.S. and higher operating expenses overseas.
Cash Flows, Capital Expenditure
The company recorded $9.7 billion in cash flow from operations, same as the year-ago period as a drop in earnings and a one-time outgo was somewhat offset by higher dividends from equity affiliates and lower working capital. Chevron’s free cash flow for the quarter was $5.6 billion.
Further, Chevron paid $2.9 billion in dividends and bought back $4.7 billion worth of its shares.
The Zacks Rank #5 (Strong Sell) company spent around $4.1 billion in capital and exploratory expenditures during the quarter, compared to the year-ago period’s $4.7 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Balance Sheet
As of Sept. 30, the only energy component of the Dow Jones Industrial Average had $4.7 billion in cash and cash equivalents and total debt of $25.8 billion with a debt-to-total capitalization of about 14.2%.
Important Energy Earnings So Far
While we have discussed Chevron third-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie SLB (SLB - Free Report) reported third-quarter 2024 adjusted earnings per share of 89 cents, a penny ahead of the Zacks Consensus Estimate and above the year-ago quarter profit of 78 cents. The robust numbers reflect broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions, and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.8 billion in the third quarter. As of Sept. 30, 2024, the company had approximately $4.5 billion in cash and short-term investments. It registered a long-term debt of $11.9 billion at the end of the quarter.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported third-quarter 2024 adjusted earnings of $1.14 per share, which missed the Zacks Consensus Estimate of $1.29 due to the significant decline in refining throughput volumes. Adjusted operating income in the Refining segment totaled $565 million, down from $3.4 billion in the year-ago quarter. The figure also missed our estimate of $1.8 billion.
Valero’s total cost of sales decreased to $32.1 billion from the year-ago figure of $34.6 billion. The figure is also below our estimate of $33 billion, primarily due to lower cost of materials and operating expenses. The third-quarter capital investment totaled $429 million, of which $338 million was allotted for sustaining the business.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported third-quarter adjusted earnings per share of 25 cents, compared to the Zacks Consensus Estimate of 27 cents. The bottom line was dragged down by lower contributions from the Products Pipelines and CO2 business segments. KMI’s third-quarter DCF was $1.1 billion, essentially same as a year ago.
As of Sept. 30, 2024, Kinder Morgan reported $108 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For full-year 2024 KMI still anticipates a DCF of $5 billion and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.