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Chevron (CVX) Tops Q3 Earnings on Strong Prices, Margins
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Chevron Corporation (CVX - Free Report) reported adjusted third-quarter earnings per share of $5.56, beating the Zacks Consensus Estimate of $5.02 and surging from the year-earlier quarter's profit of $2.96.
The outperformance could be attributed to robust commodity prices and product margins, which propelled both CVX segments to better-than-expected bottom line results.
The company generated revenue of $66.6 billion. The sales figure beat the Zacks Consensus Estimate of $59 billion and increased 49.1% year over year.
Chevron Corporation Price, Consensus and EPS Surprise
Upstream: Chevron’s production of crude oil and natural gas — at 3,027 MBOE/d (56% liquids) — remained essentially flat year over year.
The latest volume statistics reflect higher output from the Permian Basin and absence of weather-related disruptions in the Gulf of Mexico, offset by the end of the Erawan and Rokan concessions in Thailand and Indonesia, respectively
The U.S. output was up 4.3% year over year to 1,176 MBOE/d, though the company’s international operations (accounting for 61% of the total) fell 2.9% to 1,851 MBOE/d.
Despite volumes remaining unchanged from last year, Chevron’s upstream segment recorded a profit of $9.3 billion in the third quarter of 2022, rocketing from the $5.1 billion earned in the year-ago period and also beating the Zacks Consensus Estimate of $8.2 billion.
This was primarily on account of a significant improvement in commodity prices. At $76 per barrel, Chevron’s average realized liquids prices in the U.S. were 31% above the year-earlier levels while prices overseas rose 30.9%. On the natural gas front, its realizations soared 116.9% and 65%.
Downstream: Chevron’s downstream segment recorded a profit of $2.5 billion, nearly doubling from last year’s figure of $1.3 billion and beating the consensus mark of $2.3 billion. The improvement underlined higher product sales margins and strong jet fuel demand following the continued easing of pandemic restrictions.
Cash Flows, Capital Expenditure
The company recorded $15.3 billion in cash flow from operations, compared to $8.6 billion a year ago. The soaring cash flow could be attributed to strong price realizations in the upstream business. Importantly, Chevron’s free cash flow for the quarter was $12.3 billion.
Further, Chevron paid $2.7 billion in dividends and bought back $3.8 billion worth its shares.
The Zacks Rank #2 (Buy) company spent around $3.1 billion in capital and exploratory expenditures during the quarter, compared to the year-ago period’s $2 billion.
As of Sep 30, the San Ramon, CA-based company had $15.2 billion in cash and cash equivalents and total debt of $23.6 billion with a debt-to-total capitalization of about 13%.
Important Energy Releases So Far
Let’s take a look at some key energy releases so far.
Schlumberger (SLB - Free Report) , the largest oilfield contractor, announced third-quarter earnings of 63 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 55 cents. SLB recorded total revenues of $7.5 billion, outpacing the Zacks Consensus Estimate by 4.7%.
Schlumberger’s strong quarterly earnings resulted from strong activities in land and offshore resources in North America and Latin America. In more good news for investors, SLB generated a free cash flow of $1.1 billion during the period.
The Zacks Rank #2 (Buy) company’s capital expenditure came in at $382 million. As of Sep 30, 2022, SLB had approximately $3.6 billion in cash and short-term investments. It had long-term debt of $12.5 billion at the end of the third quarter.
On the other hand, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported third-quarter 2022 adjusted earnings per share of 25 cents, missing the Zacks Consensus Estimate of 29 cents per share. The disappointing bottom line numbers could be blamed on lower pipeline volumes of gasoline and diesel fuel, partially offset by higher contributions from KMI’s natural gas pipelines and CO2 segments.
As of Sep 30, 2022, Kinder Morgan reported $483 million in cash and cash equivalents. The company’s long-term debt amounted to $29 billion, resulting in a debt to capitalization of 49.6%. For 2022, KMI expects a dividend of $1.11 per share, suggesting an increase of 3% from the prior-year reported figure.
Europe’s largest oil company Shell plc (SHEL - Free Report) also reported underwhelming third-quarter earnings. The bottom line of $2.58 per share came in below the Zacks Consensus Estimate of $2.68. The underperformance reflects lower production and a pullback in refining margins from their second-quarter highs. However, SHEL’s results were well above the year-earlier quarter’s adjusted profit of $1.06 per ADS, backed by stronger commodity prices.
Meanwhile, Shell repurchased $5 billion of shares in the third quarter. The energy group also announced that it completed the $6 billion buyback program scheduled for the third quarter of 2022. Moreover, SHEL expects another $4 billion of repurchases for the fourth quarter and promised to increase its dividend by 15%.
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Chevron (CVX) Tops Q3 Earnings on Strong Prices, Margins
Chevron Corporation (CVX - Free Report) reported adjusted third-quarter earnings per share of $5.56, beating the Zacks Consensus Estimate of $5.02 and surging from the year-earlier quarter's profit of $2.96.
The outperformance could be attributed to robust commodity prices and product margins, which propelled both CVX segments to better-than-expected bottom line results.
The company generated revenue of $66.6 billion. The sales figure beat the Zacks Consensus Estimate of $59 billion and increased 49.1% year over year.
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 — at 3,027 MBOE/d (56% liquids) — remained essentially flat year over year.
The latest volume statistics reflect higher output from the Permian Basin and absence of weather-related disruptions in the Gulf of Mexico, offset by the end of the Erawan and Rokan concessions in Thailand and Indonesia, respectively
The U.S. output was up 4.3% year over year to 1,176 MBOE/d, though the company’s international operations (accounting for 61% of the total) fell 2.9% to 1,851 MBOE/d.
Despite volumes remaining unchanged from last year, Chevron’s upstream segment recorded a profit of $9.3 billion in the third quarter of 2022, rocketing from the $5.1 billion earned in the year-ago period and also beating the Zacks Consensus Estimate of $8.2 billion.
This was primarily on account of a significant improvement in commodity prices. At $76 per barrel, Chevron’s average realized liquids prices in the U.S. were 31% above the year-earlier levels while prices overseas rose 30.9%. On the natural gas front, its realizations soared 116.9% and 65%.
Downstream: Chevron’s downstream segment recorded a profit of $2.5 billion, nearly doubling from last year’s figure of $1.3 billion and beating the consensus mark of $2.3 billion. The improvement underlined higher product sales margins and strong jet fuel demand following the continued easing of pandemic restrictions.
Cash Flows, Capital Expenditure
The company recorded $15.3 billion in cash flow from operations, compared to $8.6 billion a year ago. The soaring cash flow could be attributed to strong price realizations in the upstream business. Importantly, Chevron’s free cash flow for the quarter was $12.3 billion.
Further, Chevron paid $2.7 billion in dividends and bought back $3.8 billion worth its shares.
The Zacks Rank #2 (Buy) company spent around $3.1 billion in capital and exploratory expenditures during the quarter, compared to the year-ago period’s $2 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Balance Sheet
As of Sep 30, the San Ramon, CA-based company had $15.2 billion in cash and cash equivalents and total debt of $23.6 billion with a debt-to-total capitalization of about 13%.
Important Energy Releases So Far
Let’s take a look at some key energy releases so far.
Schlumberger (SLB - Free Report) , the largest oilfield contractor, announced third-quarter earnings of 63 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 55 cents. SLB recorded total revenues of $7.5 billion, outpacing the Zacks Consensus Estimate by 4.7%.
Schlumberger’s strong quarterly earnings resulted from strong activities in land and offshore resources in North America and Latin America. In more good news for investors, SLB generated a free cash flow of $1.1 billion during the period.
The Zacks Rank #2 (Buy) company’s capital expenditure came in at $382 million. As of Sep 30, 2022, SLB had approximately $3.6 billion in cash and short-term investments. It had long-term debt of $12.5 billion at the end of the third quarter.
On the other hand, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported third-quarter 2022 adjusted earnings per share of 25 cents, missing the Zacks Consensus Estimate of 29 cents per share. The disappointing bottom line numbers could be blamed on lower pipeline volumes of gasoline and diesel fuel, partially offset by higher contributions from KMI’s natural gas pipelines and CO2 segments.
As of Sep 30, 2022, Kinder Morgan reported $483 million in cash and cash equivalents. The company’s long-term debt amounted to $29 billion, resulting in a debt to capitalization of 49.6%. For 2022, KMI expects a dividend of $1.11 per share, suggesting an increase of 3% from the prior-year reported figure.
Europe’s largest oil company Shell plc (SHEL - Free Report) also reported underwhelming third-quarter earnings. The bottom line of $2.58 per share came in below the Zacks Consensus Estimate of $2.68. The underperformance reflects lower production and a pullback in refining margins from their second-quarter highs. However, SHEL’s results were well above the year-earlier quarter’s adjusted profit of $1.06 per ADS, backed by stronger commodity prices.
Meanwhile, Shell repurchased $5 billion of shares in the third quarter. The energy group also announced that it completed the $6 billion buyback program scheduled for the third quarter of 2022. Moreover, SHEL expects another $4 billion of repurchases for the fourth quarter and promised to increase its dividend by 15%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.