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Chevron reported first quarter results Friday along with fellow oil major ExxonMobil. $CVX announced a 36% jump in earnings with the inclusion of a gain associated with the sale of upstream assets in the Philippines. However top-line fell 11%.with the economic shutdown.

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Chevron Inc. (NYSE: $CVX) Reported Earnings Before Open Friday

$1.93 Beat $0.64 EPS BUT $31.6 Beat $29.88 Billion Revenue Forecast

Earnings

Chevron Corp. (NYSE: CVX) reported first quarter results on Friday. Chevron reported earnings per share of $1.93, which included $680 million in one-time favorable items, and $31.5 billion in revenue. The Zacks Consensus estimate was 64 cents on revenues of $29.88 billion.

The result was helped by downstream margins and increased production in the Permian Basin. In the same quarter a year earlier, the oil giant earned $1.39 per share on $35.20 billion in revenue.

 

Chevron Corporation NYSE: CVX

Market Reaction $87.24  −4.77 (-2.78%)

Chevron said lower oil prices will continue to have a significant impact. “Financial results in future periods are expected to be depressed as long as current market conditions persist,” the company said.

Cash Flow

Chevron 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.

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%.

Chevron Q1 2020 Earnings

Production Highlights

Production at the nation’s second-largest oil company rose 6% year over year to reach a record high of 3.24 million barrels per day of net oil-equivalent production. Chevron said production in the Permian rose 48% year over year.

Looking forward, Chevron said it will cut between 200,000 and 300,000 barrels of oil-equivalent production in May, and between 200,000 and 400,000 barrels of oil-equivalent production in June.

Chevron said that in the first quarter, the average price per barrel of crude and natural gas liquids was $37, roughly 23% lower than a year earlier, while the sale price for natural gas dropped from $1.64 to 60 cents.

CapEx

hevron said Friday it will reduce its 2020 capital spending plans by an additional $2 billion, to $14 billion, and said it expects operating expenses to fall by $1 billion. In March, the company had previously announced a 20% cut to its capital spending plan — from $20 billion to $16 billion, and said it was suspending its stock buyback program in an effort to reduce costs. The company reiterated that its dividend

Dividends and Repurchases

The company reiterated that its dividend is a priority, and that it’s taking action to sustain it over the long term.

Chevron said that it would keep paying shareholders a quarterly dividend of $1.29.

“Together these actions are consistent with our longstanding financial priorities: to protect the dividend; to prioritize capital that drives long-term value; and to maintain a strong balance sheet,” Wirth said in a statement regarding the capital spending cuts.

About Chevron

What Analysts Will Be Watching

Chevron Corp. is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. It has large exposure to the Permian and to LNG with the  Wheatstone Chevron LNG Facility production starting in Western Australia

The Permian Basin remains a key source of capital flexibility, and it is a key issue behind many analysts preference for Chevron versus some of the other majors. Chevron’s liquids-rich upstream segment is likely to benefit from higher crude price realizations. This 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.

Sources: TradersCommunity, AlphaStreet, XOM, CVX

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