Gas pumps are visible at a Chevron gas station in Orlando.
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Chevron beat earnings expectations on Friday, but its profit fell from the identical period last 12 months as its refining and international gas businesses faced headwinds.
Here’s what Chevron reported for the primary quarter in comparison with Wall Street’s expectations, based on an LSEG analyst survey:
- Earnings per share: $2.93 adjusted vs. $2.87 expected
- Revenue: $48.72 billion versus expected $50.66 billion
The oil company’s net income fell 16% to $5.5 billion, or $2.97 per share, compared with the year-earlier quarter when it was $6.57 billion, or $3.46 per share earned. Excluding one-time items, Chevron reported profit of $2.93 per share, beating Wall Street estimates.
Sales fell from $50.79 billion a 12 months ago to $48.72 billion, falling in need of analysts’ expectations.
Chevron shares fell about 1% in premarket trading on the news.
The company attributed the declining profits to lower sales margins at its refineries and lower natural gas prices, which impacted profits in international production. Exxon faced similar problems this quarter.
Oil prices are up greater than 16% this 12 months and gasoline futures are up 31%, however the rally has done little to spice up profits given problems elsewhere within the energy industry.
Natural gas prices have plunged 37% this 12 months as a consequence of an oversupply. According to the Energy Information Administration, gasoline retail and distribution margins, or the difference between retail and refinery prices, were also lower in February and March in comparison with the identical period last 12 months.
Chevron’s refining business within the US saw profits fall by greater than half to $453 million. International refining profits took a good greater hit, falling nearly 60% to $330 million.
The U.S. oil and gas business posted a profit of about $2 billion, up 16% from the identical period last 12 months as a consequence of higher sales volumes. Chevron produced 1.57 million barrels per day of oil and gas within the U.S. in the course of the quarter, up 35%, or 406,000 barrels per day, from a 12 months ago.
The oil company attributed the production increases to strong production within the Permian and Denver-Julesburg basins.
International oil and gas revenue fell 6% to $3.2 billion as production fell 39,000 barrels to 1.77 million barrels per day as a consequence of maintenance in Nigeria and field declines. Still, total global production rose 12% to three.35 million barrels per day, the very best first-quarter production on record.
Chevron expressed confidence that the takeover would happen Hess Corp. will close in 2024 despite a challenge Exxon Mobil before an arbitration tribunal over rights in a joint operating agreement for oil resources in Guyana.
Chevron said it expects the shareholder vote and the Federal Trade Commission’s request for information concerning the deal to be accomplished within the second quarter.
Capital spending rose to $4.1 billion, up 37% from $3 billion within the year-ago period. The higher spending was on PDC Energy’s oil and gas production and legacy assets after the corporate accomplished the acquisition last August.
Chevron still paid $3 billion in dividends and repurchased nearly $3 billion of its stock within the quarter, although its return on capital of 12.4% was lower than the 14.6% in the primary quarter of the previous 12 months.
