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Chevron (CVX) Shares Gain After Posting Big Q1 Earnings Beat

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Shares of Chevron Corporation (CVX - Free Report) rose almost 2% on Friday, after the U.S. energy giant reported stronger-than-expected first-quarter earnings amid the recovery in oil prices and production gains. The company reported earnings per share of $1.90, significantly ahead of the Zacks Consensus Estimate of $1.45. The bottom line also improved significantly from the year-ago profit of $1.41.

The profit growth further confirms the industry's resurgence from the deep oil slump.

Quarterly revenues of $37,764 million lagged the Zacks Consensus Estimate of $38,737 on refining weakness but was up 13% year over year.

Chevron Corporation Price, Consensus and EPS Surprise

 

Chevron Corporation Price, Consensus and EPS Surprise | Chevron Corporation Quote

Segment Performance

Upstream: Chevron’s total production of crude oil and natural gas increased 6.6% compared with last year’s corresponding period to 2,852 thousand oil-equivalent barrels per day (MBOE/d). The U.S. output rose 9.1% year over year to 733 MBOE/d but the company’s international operations (accounting for 74% of the total) was up 5.7% to 2,119 MBOE/d.

Apart from the core business in Gulf of Mexico and higher volumes from shale assets in the prolific Permian Basin, the rise in output could be attributed to contributions from major capital projects – Gorgon and Wheatstone LNG developments in Australia.

The rise in production was supported by higher oil realizations, the result being a healthy improvement in Chevron’s upstream segment profit – from $1,517 million in the year-earlier quarter to $3,352 million.

Downstream: Chevron’s downstream segment achieved earnings of $728 million, 21.4% lower than the profit of $926 million last year. The decline primarily underlined a fall in refined products sales margins.

Cash Flows

Importantly, Chevron delivered a good cash flow performance this quarter – an important gauge for the oil and gas industry – with $5,043 million in cash flow from operations, up from $3,777 million a year ago.

Capital Expenditures

The Zacks Rank #3 (Hold) company spent $4,405 million in capital expenditures during the quarter, essentially unchanged from the year-ago period. Roughly 88% of the total outlays pertained to upstream projects.

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

Balance Sheet

As of Mar 31, 2018, the San Ramon, CA-based company had $6,466 million in cash and total debt of $39,745 million, with a debt-to-total capitalization ratio of about 20.9%.

Earnings Schedules of Other Oil Supermajors

Among the major integrated players, Royal Dutch Shell plc came out with strong profit growth, while Exxon Mobil (XOM - Free Report) , which also reported Friday, failed to meet expectations. BP plc (BP - Free Report) will report first-quarter earnings tomorrow.

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