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Chevron (CVX) Betas on Q1 Earnings, Slashes Spending Further
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Chevron Corporation (CVX - Free Report) reported adjusted first-quarter earnings per share of $1.29, above the Zacks Consensus Estimate of 64 cents. The beat was driven by strong production from the Permian Basin and higher margins on refined products.
However, the bottom line was below the year-earlier quarter's earnings of $1.39 per share due to lower oil and natural gas price realizations.
The company generated revenue of $31.5 billion. The sales figure beat the Zacks Consensus Estimate of $29.9 billion but was down 10.5% year over year.
In view of the historic oil market crash and the coronavirus-induced demand destruction for oil, Chevron now expects to spend $14 billion for the year, compared to its previously lowered estimate of $16 billion and 30% less than its initial projection. The company is also targeting $1 billion in operating cost cuts.
Meanwhile, Chevron said that it would keep paying shareholders a quarterly dividend of $1.29, following BP plc (BP - Free Report) and ExxonMobil (XOM - Free Report) in maintaining payouts despite the difficult operating environment. This earnings season has already seen two oil majors - Royal Dutch Shell and Equinor – trim their dividend payments.
Chevron Corporation Price, Consensus and EPS Surprise
Upstream: Chevron’s production of crude oil and natural gas increased 6.5% from the year-earlier level to a record 3,235 thousand oil-equivalent barrels per day/MBOE/d (61% liquids) – the sixth successive quarter where volumes exceeded 3 million barrels per day.
Contribution from the shale assets in the prolific Permian Basin more than offset the effects of normal field declines, and the impact of asset dispositions. The first-quarter average production from the showpiece Permian Basin was 580 MBOE/d, up 48% year over year.
The U.S. output rose 20.4% year over year to 1,064 MBOE/d while the company’s international operations (accounting for 67% of the total) edged up 0.8% to 2,171 MBOE/d.
Despite all-time high production volumes, Chevron’s upstream segment income was down 6.5% year over year to $2.9 billion – mainly due to lower oil and gas realizations.
Downstream: Chevron’s downstream segment achieved earnings of $1.1 billion, significantly higher than the profit of $252 million last year. The surge primarily underlined a rise in refined products sales margins.
Cash Flows, Capital Expenditure
America's No. 2 energy producer behind ExxonMobil recorded $4.7 billion in cash flow from operations, down from $5.1 billion a year ago. The decrease in cash flow could be attributed to falling lower price realizations in the upstream business.
In the first quarter, Chevron paid $2.4 billion in dividends.
The Zacks Rank #5 (Strong Sell) company spent $4.4 billion in capital and exploratory expenditures during the quarter, down from the year-ago period’s $4.7 billion. More than 88% of the total outlays pertained to upstream projects.
As of Mar 31, the San Ramon, CA-based company had $8.5 billion in cash and cash equivalents and total debt of $32.4 billion, with a debt-to-total capitalization ratio of about 18.4%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Chevron (CVX) Betas on Q1 Earnings, Slashes Spending Further
Chevron Corporation (CVX - Free Report) reported adjusted first-quarter earnings per share of $1.29, above the Zacks Consensus Estimate of 64 cents. The beat was driven by strong production from the Permian Basin and higher margins on refined products.
However, the bottom line was below the year-earlier quarter's earnings of $1.39 per share due to lower oil and natural gas price realizations.
The company generated revenue of $31.5 billion. The sales figure beat the Zacks Consensus Estimate of $29.9 billion but was down 10.5% year over year.
In view of the historic oil market crash and the coronavirus-induced demand destruction for oil, Chevron now expects to spend $14 billion for the year, compared to its previously lowered estimate of $16 billion and 30% less than its initial projection. The company is also targeting $1 billion in operating cost cuts.
Meanwhile, Chevron said that it would keep paying shareholders a quarterly dividend of $1.29, following BP plc (BP - Free Report) and ExxonMobil (XOM - Free Report) in maintaining payouts despite the difficult operating environment. This earnings season has already seen two oil majors - Royal Dutch Shell and Equinor – trim their dividend payments.
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 6.5% from the year-earlier level to a record 3,235 thousand oil-equivalent barrels per day/MBOE/d (61% liquids) – the sixth successive quarter where volumes exceeded 3 million barrels per day.
Contribution from the shale assets in the prolific Permian Basin more than offset the effects of normal field declines, and the impact of asset dispositions. The first-quarter average production from the showpiece Permian Basin was 580 MBOE/d, up 48% year over year.
The U.S. output rose 20.4% year over year to 1,064 MBOE/d while the company’s international operations (accounting for 67% of the total) edged up 0.8% to 2,171 MBOE/d.
Despite all-time high production volumes, Chevron’s upstream segment income was down 6.5% year over year to $2.9 billion – mainly due to lower oil and gas realizations.
Downstream: Chevron’s downstream segment achieved earnings of $1.1 billion, significantly higher than the profit of $252 million last year. The surge primarily underlined a rise in refined products sales margins.
Cash Flows, Capital Expenditure
America's No. 2 energy producer behind ExxonMobil recorded $4.7 billion in cash flow from operations, down from $5.1 billion a year ago. The decrease in cash flow could be attributed to falling lower price realizations in the upstream business.
In the first quarter, Chevron paid $2.4 billion in dividends.
The Zacks Rank #5 (Strong Sell) company spent $4.4 billion in capital and exploratory expenditures during the quarter, down from the year-ago period’s $4.7 billion. More than 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, the San Ramon, CA-based company had $8.5 billion in cash and cash equivalents and total debt of $32.4 billion, with a debt-to-total capitalization ratio of about 18.4%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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