Back to top

Image: Shutterstock

Can Chevron Beat Estimates Again This Earnings Season?

Read MoreHide Full Article

Chevron Corporation (CVX - Free Report) is scheduled to report fourth-quarter 2019 earnings before the opening bell on Jan 31. The energy giant’s quarterly results surpassed the Zacks Consensus Estimate in the past four quarters. Its stock, however, declined 3.7% against the S&P 500’s gain of 20.2% in the past one-year period.

What Hit the Chevron Stock in Q4?

The last quarter of 2019 was an eventful one for Chevron.The blue-chip energy company not only participated in acquisitions, but also sanctioned new projects and boosted production in the quarter ended December 2019.

First, production growth that started in third-quarter 2019 is likely to have sustained throughout the fourth quarter. The company’s total upstream production of crude oil and natural gas in third-quarter 2019 rose 2.6% year over year to 3,033 thousand oil-equivalent barrels per day (MBOE/d). In fact, this was the fourth consecutive quarter in which production volumes exceeded 3 million barrels per day.

In third-quarter 2019, Chevron sanctioned a waterflood project in the St. Malo field, which is expected to add an estimated ultimate recovery of more than 175 million barrels of oil equivalent. Additionally, the company’s 2.2 million net acres of holdings in the Permian already resulted in 71% production growth in 2018. Production volumes from the region increased 38.6% in the third quarter to 455 MBOE/d.

Second, Chevron sanctioned the industry’s first deepwater high-pressure development through the Anchor project in the U.S. Gulf of Mexico in December. The project is expected to lower development costs for new projects in the Gulf of Mexico by nearly one-third against what it cost the company because of its last generation of greenfield deepwater investments.

Finally, Chevron also built a stronger partnership in Australia by signing a conditional Share Sale Agreement with Puma Energy Asia Pacific B.V. in December. The acquisition is expected to provide Chevron with a stable market for production volumes from its refining joint ventures in Asia and thus uphold earnings growth.

Q4 2019 Earnings and Revenue Expectations

The Zacks Consensus Estimate for Chevron’s fourth-quarter 2019 earnings is $1.44 per share, which suggests a decline from the year-ago earnings of $2.06.

The Zacks Consensus Estimate for Chevron’s fourth-quarter 2019 revenues is $38.8 billion, which suggests a decline from the energy giant’s revenues of $42.35 billion for the quarter ended December 2018.

However, our proprietary model predicts an earnings beat for Chevron in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. In this case, the stock fulfills the above-mentioned criteria. Chevron has an Earnings ESP of +0.8%. The stock currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chevron Corporation Price and EPS Surprise

Chevron Corporation Price and EPS Surprise

Chevron Corporation price-eps-surprise | Chevron Corporation Quote

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Chevron Corporation (CVX) - free report >>

Published in