Chevron (CVX) Reports Earnings Tomorrow: What to Watch

Chevron (CVX) reports third-quarter results before the market opens on Friday, 30 October, with a call at 11 a.m. ET.

Last quarter it beat comfortably. Adjusted earnings were $12.0 billion, or $6.06 a share, against the $5.56 analysts expected, according to LSEG data cited by Reuters, which called it Chevron’s highest quarterly profit in at least six years. Production rose 20% from a year earlier, to about 4.07 million barrels of oil equivalent a day, and refining and fuel sales earned $4.9 billion. The stock rose 2.4% on 31 July, to $196.83.

Chief Executive Mike Wirth was blunt about the war with Iran. “Every day that goes by, the situation gets more difficult,” he told CNBC, according to Reuters.

What analysts expect

Analysts expect adjusted EPS of $4.78, according to Nasdaq’s earnings calendar and Zacks, up from $1.85 a year ago. A wider count of 22 analysts on Yahoo Finance averages $4.87. Revenue estimates run from $61.8 billion on MarketBeat to $62.0 billion on Yahoo Finance, against $49.7 billion of total revenue a year ago.

What to watch

• Refining. Downstream, Chevron’s refining and fuel-selling business, was the star of the last quarter. Exxon Mobil (XOM) said on 16 October that stronger refining margins should add about $4.5 billion to its own earnings compared with the second quarter, a good sign for the industry’s refiners.
• Production. The 20% growth rate is unlikely to repeat. Output in last year’s third quarter was already 4.09 million barrels of oil equivalent a day, about the same as the latest quarter’s, so this time the test is whether it holds up rather than how fast it grows.
• Where the cash goes. Chevron bought back $3.1 billion of stock in the second quarter, its release showed, and kept its full-year buyback target of $10 billion to $20 billion, Reuters reported. On 6 October it agreed to exit Hess Midstream, taking about $3.7 billion of debt off its books by year-end. It expects a one-time after-tax loss of $3 billion to $4 billion at closing.

How the stock has done

Chevron edged up 1.0% on Thursday to $231.46, 0.8% below its 52-week closing high of $233.21 from 23 October. The stock is up 51.9% this year and 13.3% over the past month, and it has gained 17.6% since the day of its last report, by our count. Exxon reports the same morning.