Chevron reported fourth-quarter earnings under Wall Avenue estimates on Friday as weak margins dragged its refining enterprise right into a loss for the primary time since 2020.
CEO Mike Wirth informed Reuters the post-pandemic surge in gasoline margins had run its course, and the downtrend is about to proceed this 12 months.
The second-largest U.S. oil producer, which on Friday turned one of many first corporations to heed U.S. President Donald Trump‘s govt order renaming the Gulf of Mexico the “Gulf of America,” posted adjusted earnings per share of $2.06.
That was under Wall Avenue’s $2.11 estimate, pushing Chevron shares down over 4% to a three-week low of $148.68.
Revenue on gasoline gross sales tumbled throughout the trade final 12 months, as a post-pandemic demand surge pale and financial exercise faltered in america and China, the 2 largest oil customers.
Chevron’s downstream enterprise misplaced $248 million within the fourth quarter of 2024, in contrast with a revenue of $1.15 billion in the identical interval a 12 months in the past.
Revenue from the corporate’s oil and gasoline exploration and manufacturing unit rose to $4.3 billion from $1.59 billion a 12 months in the past when the determine included expenses, however the U.S. enterprise missed consensus estimates, RBC analysts mentioned in a word.
“A comparatively comfortable set of numbers,” RBC analysts wrote of Chevron’s outcomes. “With the robust run CVX has had relative to friends over current months, we count on these outcomes to be taken as disappointing,” they mentioned.
Refining margins softened in each U.S. and worldwide markets, however weak jet gasoline demand aggravated troubles for the Houston-based firm’s home enterprise. U.S. gasoline gross sales fell 3% year-over-year, Chevron mentioned.
“This development we’ve got seen of margins softening via 2024 is one thing you possibly can count on to proceed to see, to increase into 2025,” he mentioned.
Weak refining margins and decrease oil costs throughout the fourth quarter additionally weighed on Exxon Mobil‘s earnings, however the high U.S. oil producer beat analyst estimates. Exxon shares have been down 1.6%.
Chevron stays locked in a bitter arbitration battle with Exxon over its proposed $53-billion takeover of Hess, which owns a 30% stake in Exxon’s Guyana holdings.
Earlier discussions to try to settle the dispute have ended and Chevron is concentrated on the arbitration, Wirth mentioned.
File Permian output
Whereas refining struggled, Chevron’s oil manufacturing held comparatively flat within the fourth quarter at 3.35 million barrels of oil equal per day (boepd), in contrast with 3.39 million boepd a 12 months in the past.
Manufacturing from the Permian Basin of Texas and New Mexico grew 14% year-over-year to a report 992,000 boepd, bringing the corporate inside touching distance of a goal to succeed in 1 million boepd within the high U.S. oilfield this 12 months, Wirth mentioned.
Future progress will come partly from the Gulf of America, as the corporate described the ocean basin recognized internationally because the Gulf of Mexico.
Chevron expects its world output to develop 6% to eight% this 12 months, and three% to six% in 2026, assuming Brent crude oil costs of round $70 a barrel, the corporate mentioned. Brent at present trades round $77.
The corporate hiked its quarterly dividend 5% to $1.71 per share and reaffirmed expectations of including $10 billion in free money movement over the following two years.
Chevron additionally pledged to proceed shopping for again $10 billion to $20 billion of its shares annually, relying on market situations.
