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Chevron (CVX) Q2 Earnings Miss on Natural Gas, Refining Woes
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Chevron Corporation (CVX - Free Report) reported adjusted second-quarter earnings per share of $2.55, lagging the Zacks Consensus Estimate of $2.88 and declining from the year-ago adjusted profit of $3.08.
The underperformance stemmed from weaker natural gas realizations, plus a dip in refined product sales margins. This was partly offset by higher-than-expected U.S. production in the company’s key upstream segment. The unit’s domestic output of 1,572 thousand oil-equivalent barrels per day (MBOE/d) came in above the consensus mark of 1,535 MBOE/d.
The company generated revenues of $51.2 billion. The sales figure beat the Zacks Consensus Estimate of $50.8 billion and increased 4.7% year over year.
Chevron Corporation Price, Consensus and EPS Surprise
Upstream: Chevron’s production of crude oil and natural gas — at 3,292 MBOE/d (59% liquids) — rose 11.3% year over year. The latest volume statistics primarily reflect contribution from the PDC Energy acquisition and impressive output from the Permian basin — America's hottest and lowest-cost shale region.
The U.S. output surged 29% year over year to 1,572 MBOE/d but the company’s international operations (accounting for 52% of the total) edged down 1.1% to 1,720 MBOE/d.
Despite volumes improving from last year, Chevron’s second-quarter 2024 upstream segment profit fell 9.4% to $4.5 billion. This was primarily due to a steep decline in U.S. natural gas prices.
At $59.85 per barrel, Chevron’s average realized liquids prices in the United States were 6.3% above the year-earlier levels, while prices overseas increased 10.1% to $74.92 per barrel. But as far as natural gas is concerned, the commodity was down 38.2% and 8.5%, respectively in the United States and internationally.
Downstream: Chevron’s downstream segment recorded a profit of $597 million, plunging from last year’s figure of $1.5 billion. The slip underlined lower product sales margins and higher operating expenses in the United States.
Cash Flows, Capital Expenditure
The company recorded $6.3 billion in cash flow from operations, same as the year-ago period as a drop in as lower earnings was somewhat offset by higher dividends from equity affiliates and lower working capital. Chevron’s free cash flow for the quarter was $2.3 billion.
Further, Chevron paid $3 billion in dividends and bought back $3 billion worth of its shares.
The Zacks Rank #3 (Hold) company spent around $4 billion in capital and exploratory expenditures during the quarter compared to the year-ago period’s $3.8 billion.
As of Jun 30, the San Ramon, CA-based company had $4 billion in cash and cash equivalents and total debt of $23.2 billion with a debt-to-total capitalization of about 12.7%.
Important Energy Earnings So Far
While we have discussed Chevron second-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie Halliburton (HAL - Free Report) reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably affected by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter DCF was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For full-year 2024 KMI still anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Chevron (CVX) Q2 Earnings Miss on Natural Gas, Refining Woes
Chevron Corporation (CVX - Free Report) reported adjusted second-quarter earnings per share of $2.55, lagging the Zacks Consensus Estimate of $2.88 and declining from the year-ago adjusted profit of $3.08.
The underperformance stemmed from weaker natural gas realizations, plus a dip in refined product sales margins. This was partly offset by higher-than-expected U.S. production in the company’s key upstream segment. The unit’s domestic output of 1,572 thousand oil-equivalent barrels per day (MBOE/d) came in above the consensus mark of 1,535 MBOE/d.
The company generated revenues of $51.2 billion. The sales figure beat the Zacks Consensus Estimate of $50.8 billion and increased 4.7% 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 3,292 MBOE/d (59% liquids) — rose 11.3% year over year. The latest volume statistics primarily reflect contribution from the PDC Energy acquisition and impressive output from the Permian basin — America's hottest and lowest-cost shale region.
The U.S. output surged 29% year over year to 1,572 MBOE/d but the company’s international operations (accounting for 52% of the total) edged down 1.1% to 1,720 MBOE/d.
Despite volumes improving from last year, Chevron’s second-quarter 2024 upstream segment profit fell 9.4% to $4.5 billion. This was primarily due to a steep decline in U.S. natural gas prices.
At $59.85 per barrel, Chevron’s average realized liquids prices in the United States were 6.3% above the year-earlier levels, while prices overseas increased 10.1% to $74.92 per barrel. But as far as natural gas is concerned, the commodity was down 38.2% and 8.5%, respectively in the United States and internationally.
Downstream: Chevron’s downstream segment recorded a profit of $597 million, plunging from last year’s figure of $1.5 billion. The slip underlined lower product sales margins and higher operating expenses in the United States.
Cash Flows, Capital Expenditure
The company recorded $6.3 billion in cash flow from operations, same as the year-ago period as a drop in as lower earnings was somewhat offset by higher dividends from equity affiliates and lower working capital. Chevron’s free cash flow for the quarter was $2.3 billion.
Further, Chevron paid $3 billion in dividends and bought back $3 billion worth of its shares.
The Zacks Rank #3 (Hold) company spent around $4 billion in capital and exploratory expenditures during the quarter compared to the year-ago period’s $3.8 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Balance Sheet
As of Jun 30, the San Ramon, CA-based company had $4 billion in cash and cash equivalents and total debt of $23.2 billion with a debt-to-total capitalization of about 12.7%.
Important Energy Earnings So Far
While we have discussed Chevron second-quarter result in detail, let’s take a look at some other key energy reports of this season.
Oil service biggie Halliburton (HAL - Free Report) reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported second-quarter 2024 adjusted earnings of $2.71 per share, which beat the Zacks Consensus Estimate of $2.61, driven by an increase in refining throughput volumes. Adjusted operating income in the Refining segment totaled $1.2 billion, down from $2.4 billion in the year-ago quarter. The figure also missed our estimate of $2.1 billion.
Valero’s total cost of sales increased to $33.1 billion from the year-ago figure of $31.5 billion. The figure is also above our estimate of $31.3 billion, primarily due to higher material costs. The second-quarter capital investment totaled $420 million, of which $329 million was allotted for sustaining the business.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably affected by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter DCF was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For full-year 2024 KMI still anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.