U.S. energy giant
) reported weak second quarter earnings on lower crude prices and
soft downstream margins.
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Earnings per share (excluding adjustments for foreign-currency
effects) came in at $2.62, below the Zacks Consensus Estimate of
$2.96 and the previous year's $3.57.
The integrated supermajor's quarterly revenue decreased 8.4% year
over year to $57,369.0 million. However, it managed to beat the
Zacks Consensus Estimate by 1.5% amid elevated North American gas
Exxon Mobil Corp.
) - the world's largest publicly traded oil company - reported
lower-than-expected earnings yesterday. In fact, the quarter
under review has been disappointing for 'Big Oil' with European
Royal Dutch Shell plc
) also coming out with below-par results.
Chevron's total production of crude oil and natural gas decreased
by 1.6% from the year-earlier level to 2,582 thousand
oil-equivalent barrels per day (MBOE/d). Volume gains in U.S. and
contribution from the newly commenced Angola liquefied natural
gas (LNG) project were more than negated by normal field
The U.S. output remained flat year over year, while Chevron's
international operations (accounting for 74% of the total)
delivered experienced a 2.1% decline in volumes. Moreover, losses
on the production front were accompanied by depressed crude oil
prices, with the net effect resulting in an 11.9% year-over-year
decline in upstream earnings to $4,949.0 million.
Chevron's production outlook remains one of the most robust in
its peer group, with a number of major initiatives scheduled to
come online during the next few years. Major start-ups during the
last few months include the LNG project in Angola, deepwater Usan
project in Nigeria and the Caesar/Tonga project in the deepwater
Gulf of Mexico.
Amongst the major upcoming projects, Chevron's Gorgon and
Wheatstone natural gas initiatives in Australia are progressing
well, while the Jack/St. Malo and Big Foot initiatives in the
deepwater Gulf of Mexico remain on track for 2014 start-up.
Chevron's downstream segment achieved earnings of $766 million,
59.3% lower than the profit of $1,881.0 million last year. The
results were negatively influenced by lower refined product sales
margins and higher repair/maintenance expenses in its domestic
business. Additionally, last year's results were buoyed by the
sale of its South Korean assets.
Capital Expenditure, Balance Sheet & Share
The second-largest U.S. oil company by market value after Exxon
Mobil spent $9,452.0 million in capital expenditures during the
quarter. Approximately 91% of the total outlays pertained to
As of Jun 30, 2013, the San Ramon, California-based company had
$20,630.0 million in cash and total debt of $19,964.0 million,
with a debt-to-total capitalization ratio of about 12.3%. As part
of the stock repurchase program announced in 2010, Chevron
repurchased $1,250.0 million worth of shares in the second
Chevron currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.