Categories AlphaGraphs, Earnings, Energy

Chevron Q4 earnings beat amid strong production growth; stock gains

Shares of Chevron Corp. (CVX) gained Friday after the energy exploration company reported double-digit growth in its fourth-quarter earnings, supported by lower expenses. While earnings topped analysts’ forecast, revenues fell short of expectations.

Chevron Q4 earnings beat estimates
Chevron Q4 2018 earnings infographic

During the December quarter, revenues moved up 12.6% annually to $42.4 billion, which came in slightly below market expectations. The top-line growth reflects a marked increase in downstream and upstream production.

Net income was $3.7 billion or $1.95 per share, up from $3.1 billion or $1.64 per share recorded in the prior-year period. Analysts were looking for slower growth. Profit benefited from a reduction in expenses and high crude oil prices, besides favorable foreign exchange rates.

The bottom-line benefited from a reduction in expenses and high crude oil prices, besides favorable foreign exchange rates

“Earnings and cash flow continued to grow, and we delivered on all of our financial priorities. We increased the dividend, funded an attractive capital program, strengthened the balance sheet and returned surplus cash to our shareholders,” said CEO Michael Wirth.

Daily production increased 7% year-over-year to a record high of 2.93 million barrels per day. Having added about 1.46 billion barrels of net oil-equivalent proved reserves last year, the management expects to achieve 4-7% growth in 2019.

Total net oil-equivalent production rose 12% annually to 3.1 billion barrels per day in the fourth quarter. Meanwhile, there was a sharp decrease in earnings from both upstream and downstream operations compared to the year-ago period, when the results included benefits from the tax reform.

Salso see: Chevron Corp. Q4 2018 Earnings Conference Call Transcript

Chevron repurchased shares worth $1 billion during the December quarter and increased its dividend by $0.07 per share. Recently, the management had announced plans to invest about $20 billion for exploration and development activities in 2019, with focus on short-cycle projects that can yield returns in the short term.

Meanwhile, Exxon Mobil Corp. (XOM) reported a 28% drop in its earnings for the fourth quarter, owing to the impact of tax reform and impairment charges. However, the results exceeded analysts’ expectation. Revenues increased 8% to about $72 billion.

Chevron shares closed the last trading session higher and maintained the uptrend in the premarket-trading Friday. The stock has declined about 3% in the past twelve months.

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