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Chevron reported worse than expected fourth quarter earnings Friday for the third quarter in a row. Nevertheless $CVX increased their dividend payout for the 33rd consecutive year. Capital spending was down, the Noble Energy acquisition completed in October 2020. Revenue continues to be hammered by the coronavirus economic collapse.

Chevron Gas Station

Chevron is the US's second biggest oil company after Exxon

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

($0.33) Missed ($0.07) EPS AND $24.45B Missed $25.8 Billion Revenue Forecast

Earnings

Chevron Corp. (NYSE: CVX) reported fourth quarter results on Friday with a loss of $665m in the final quarter of last year, compared with a loss of $207m in the third quarter. The loss per share was $0.33, much worse than analysts’ expectations of a $0.07 per share gain. Adjusted for currency effects and charges relating to its acquisition of Noble Energy, which closed last quarter, Chevron said its loss was $11m, or $0.01 per diluted share. Revenue of $25,246,000,000 declined by 30.55% year over year, which missed the estimate of $26,200,000,000.

The group’s full-year loss was $5.5bn, compared with a profit of $2.9bn in 2019. Revenue of $94.7bn in 2020 marked Chevron’s second worst year this century. Despite the sharp decline in revenues, the company held its quarterly dividend steady at $1.29. 

CVX Earnings Q4 20 v Q3 20

Chevron Corporation NYSE: CVX

Market Reaction Pre-market 86.09 ▼ 2.93 (3.29%)

Highlights  

“2020 was a year like no other,” said Mike Wirth, Chevron’s chief executive. He added that the company ended the year “with a strong balance sheet, having completed a major acquisition and increased our dividend payout for the 33rd consecutive year”.

  • Capital expenditure fell to $13.5bn from $21bn in 2019.
  • In December, Chevron reduced planned capital expenditure to $14bn this year and set an annual cap of $22bn through to 2025.
  • Chevron scaled back its projections for near-term production growth, including in the prolific Permian shale of the US.
  • Chevron said fourth-quarter production was flat at 2.08m barrels of oil equivalent a day, compared with the fourth quarter of 2019, with new production from the Noble Energy acquisition offsetting curtailments elsewhere.

Chevron Production Q4 2020

  • At the end of FY2020, cash, cash equivalents, and marketable securities totaled $5.6 billion.
  • For 2018 through 2020, the company generated asset sales proceeds of $7.7 billion, in the middle of its guidance range of $5-$10 billion.
  • Chevron added 832 million barrels of net oil-equivalent proved reserves in 2020. T
  • The largest net additions were from the acquisition of Noble Energy and from assets in Kazakhstan.
  • The largest net reductions were from assets in Australia, Venezuela, and the Permian Basin and asset sales in Appalachia.
  • The company will provide additional details relating to 2020 reserve additions in its Annual Report on Form 10-K scheduled for filing with the SEC on February 25, 2021.

CVX Earnings Q4 20

The company’s $13bn acquisition of Noble,  the first big move in a wave of mergers that swept through the battered US oil sector last year. closed in the fourth quarter. For 2018 through 2020, the company generated asset sales proceeds of $7.7 billion, in the middle of its guidance range of $5-$10 billion. 

Outlook

Chevron hasn't issued any earnings guidance for the time being. Revenue guidance hasn't been issued by the company for now. 

 

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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