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What's in the Offing for Chevron (CVX) This Earnings Season?
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Chevron Corporation (CVX - Free Report) is set to release second-quarter 2018 results on Jul 27 before the opening bell. The Zacks Consensus Estimate for earnings stands at $2.08 on revenues of $40,909 million.
In the preceding three-month period, the company delivered a positive earnings surprise of 31.03% on the back of pricing and production gains. Coming to earnings surprise history, though the supermajor surpassed estimates in three of the trailing four quarters, it recorded an average negative earnings surprise of 1.30%.
The Zacks Consensus Estimate of $2.08 for the second quarter has been revised upward by 5 cents in the past seven days. The earnings estimate also reflects a year-over-year increase of 128.6%.
Let’s delve deeper into the factors that are likely to influence Chevron’s second-quarter earnings.
Factors at Play
Average West Texas Intermediate (WTI) crude prices were recorded at $66.25, $69.98 and $67.87 per barrel for the month of April, May and June 2018, respectively, per data from the U.S. Energy Information Administration (EIA). These prices were considerably higher than the year-ago respective prices of $51.06, $48.48 and $45.18. Chevron’s liquids-rich upstream segment is likely to benefit from higher crude price realizations. Further, the segment is expected to record higher production volumes on the back of major capital projects including Gorgon, and core developments in the Gulf of Mexico and Permian Basin.
The Zacks Consensus Estimate for the total output of oil and gas is pegged at 2,860 thousand oil-equivalent barrels per day (MBOE/d), around 3% higher than the prior-year quarter. Driven by production and pricing gains, the Zacks Consensus Estimate for its upstream segment’s profit is pegged at $2,909 million, reflecting massive growth from second-quarter 2017’s figure of $853 million.
However, Chevron’s downstream segment is anticipated to limit overall earnings. Even in the last reported quarter, the segment’s income declined 21.4% year over year. The downstream unit is likely to bear the brunt of lower refinery input per day and reduced refined products sales margins in the second quarter as well. The Zacks Consensus Estimate for total refinery input is $1,650 thousand barrels per day (Mbbl/d) for the to-be-reported quarter, down from $1,654 Mbbl/d in the year-ago quarter. Segmental income is expected to deteriorate to $1,090 million from $1,195 million recorded in the second quarter of 2017. While downstream income in the United States is expected to increase, profit from international operations is likely to decline. The Zacks Consensus Estimate for the downstream unit’s segmental income for the second quarter of 2018 stands at $479 million compared with $561 million generated in the prior-year quarter.
Earnings Whispers
Our proven model does not show that Chevron is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. That is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.36%. This is because the Most Accurate Estimate stands at $2.07 while the Zacks Consensus Estimate is pegged at $2.08.
Zacks Rank: Currently, Chevron carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, we caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings
While earnings beat looks uncertain for Chevron, one can consider firms from the energy space that have the right combination of elements to beat estimates in the quarter to be reported:
Anadarko Petroleum Corporation has an Earnings ESP of +5.26% and a Zacks Rank #2. The energy explorer is anticipated to release second-quarter earnings on Jul 31.
California Resources Corporation (CRC - Free Report) has an Earnings ESP of +54.72% and a Zacks Rank #2. The energy explorer is anticipated to report second-quarter results on Aug 02.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #1. The energy explorer is anticipated to announce second-quarter earnings on Aug 02.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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What's in the Offing for Chevron (CVX) This Earnings Season?
Chevron Corporation (CVX - Free Report) is set to release second-quarter 2018 results on Jul 27 before the opening bell. The Zacks Consensus Estimate for earnings stands at $2.08 on revenues of $40,909 million.
In the preceding three-month period, the company delivered a positive earnings surprise of 31.03% on the back of pricing and production gains. Coming to earnings surprise history, though the supermajor surpassed estimates in three of the trailing four quarters, it recorded an average negative earnings surprise of 1.30%.
The Zacks Consensus Estimate of $2.08 for the second quarter has been revised upward by 5 cents in the past seven days. The earnings estimate also reflects a year-over-year increase of 128.6%.
Chevron Corporation Price and EPS Surprise
Chevron Corporation Price and EPS Surprise | Chevron Corporation Quote
Let’s delve deeper into the factors that are likely to influence Chevron’s second-quarter earnings.
Factors at Play
Average West Texas Intermediate (WTI) crude prices were recorded at $66.25, $69.98 and $67.87 per barrel for the month of April, May and June 2018, respectively, per data from the U.S. Energy Information Administration (EIA). These prices were considerably higher than the year-ago respective prices of $51.06, $48.48 and $45.18. Chevron’s liquids-rich upstream segment is likely to benefit from higher crude price realizations. Further, the segment is expected to record higher production volumes on the back of major capital projects including Gorgon, and core developments in the Gulf of Mexico and Permian Basin.
The Zacks Consensus Estimate for the total output of oil and gas is pegged at 2,860 thousand oil-equivalent barrels per day (MBOE/d), around 3% higher than the prior-year quarter. Driven by production and pricing gains, the Zacks Consensus Estimate for its upstream segment’s profit is pegged at $2,909 million, reflecting massive growth from second-quarter 2017’s figure of $853 million.
However, Chevron’s downstream segment is anticipated to limit overall earnings. Even in the last reported quarter, the segment’s income declined 21.4% year over year. The downstream unit is likely to bear the brunt of lower refinery input per day and reduced refined products sales margins in the second quarter as well. The Zacks Consensus Estimate for total refinery input is $1,650 thousand barrels per day (Mbbl/d) for the to-be-reported quarter, down from $1,654 Mbbl/d in the year-ago quarter. Segmental income is expected to deteriorate to $1,090 million from $1,195 million recorded in the second quarter of 2017. While downstream income in the United States is expected to increase, profit from international operations is likely to decline. The Zacks Consensus Estimate for the downstream unit’s segmental income for the second quarter of 2018 stands at $479 million compared with $561 million generated in the prior-year quarter.
Earnings Whispers
Our proven model does not show that Chevron is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. That is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.36%. This is because the Most Accurate Estimate stands at $2.07 while the Zacks Consensus Estimate is pegged at $2.08.
Zacks Rank: Currently, Chevron carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, we caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings
While earnings beat looks uncertain for Chevron, one can consider firms from the energy space that have the right combination of elements to beat estimates in the quarter to be reported:
Anadarko Petroleum Corporation has an Earnings ESP of +5.26% and a Zacks Rank #2. The energy explorer is anticipated to release second-quarter earnings on Jul 31.
California Resources Corporation (CRC - Free Report) has an Earnings ESP of +54.72% and a Zacks Rank #2. The energy explorer is anticipated to report second-quarter results on Aug 02.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #1. The energy explorer is anticipated to announce second-quarter earnings on Aug 02.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>