Categories AlphaGraphs, Earnings, Energy

Chevron’s stock picks up after Q3 earnings beat estimates

Chevron Corporation (CVX) surpassed analysts’ expectations on earnings for the third quarter of 2018 but revenues came in shy of forecasts. Despite the revenue miss, the stock gained over 3.6% in mid-morning trade on Friday.

Total revenues and other income increased to $43.9 billion in the quarter from $36.2 billion in the same period last year. Net income improved to $4 billion or $2.11 per share versus $2 billion or $1.03 per share in the prior-year period. Analysts had projected an earnings of $2.06 per share on revenues of $46 billion.

Chevron third quarter 2018 Earnings Infographic
Chevron Q3 2018 Earnings Infographic

Chevron’s earnings in the third quarter included a write-off, an asset impairment, a non-recurring contractual settlement in the upstream segment, and a gain on the sale of its southern Africa assets. The results benefited from higher production and crude oil prices during the period. The negative impact from foreign currency was lower in this year’s third quarter versus last year.

The company delivered cash flow from operations of $9.6 billion, the highest level in around five years, which helped in funding dividend payments and stock repurchases, and also in strengthening the balance sheet.

Chevron achieved a record in net oil-equivalent production, which totaled 2.96 million barrels per day. This was helped by the ramp-up of Wheatstone in Australia and the Permian Basin in Texas and New Mexico, which drove a production increase of 9% over last year.

Chevron earnings rise on production spike, but miss street view

Upstream operations within and outside the US saw earnings growth, driven by increases in crude oil realizations and production, as well as higher natural gas realizations and sales volumes. Earnings in the US downstream operations improved from last year due to higher equity earnings from the Chevron Phillips Chemical Company LLC and lower tax expense.

International downstream earnings declined from the previous year due to lower gains on asset sales and lower margins on refined product sales.

 

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