U.S. energy giant
) reported weak fourth quarter results on falling production and
refinery margins. It reflected in its share price on the NYSE,
where it fell almost 4% in early trade.
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Earnings per share (excluding adjustments for foreign-currency
effects) came in at $2.47, below the Zacks Consensus Estimate of
$2.58 and deteriorated considerably from the year-ago adjusted
profit of $3.78 per share.
The integrated supermajor's quarterly revenue decreased 7.3% year
over year to $56,158.0 million and was way below the Zacks
Consensus Estimate of $76,427.0 million.
Chevron is the third of the integrated supermajors to come out
with fourth quarter results. Fellow biggies
Exxon Mobil Corp.
) and Europe's largest oil company
Royal Dutch Shell plc
) both reported yesterday.
Chevron's total production of crude oil and natural gas decreased
by 3.5% from the year-earlier level to 2,576 thousand
oil-equivalent barrels per day (MBOE/d). Contribution from
project ramp-ups in the U.S. and Nigeria were more than negated
by normal field declines and a decrease in cost recovery volumes.
The U.S. output dipped 3.6% year over year, while Chevron's
international operations (accounting for 75% of the total)
registered a 3.4% fall in volumes.
Losses on the production front were accompanied by lower
international natural gas prices and skyrocketing exploration
expenses, the net effect resulting in a 29.3% year-over-year
decline in upstream earnings to $4,852.0 million.
However, despite the lower volumes for the quarter under
consideration, 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 liquefied
natural gas (LNG) project in Angola, deepwater Usan project in
Nigeria and the Caesar/Tonga project in the deepwater Gulf of
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 late 2014 start-up.
Chevron's downstream segment achieved earnings of $390.0 million,
57.8% lower than the profit of $925.0 million last year. The
results were negatively influenced by lower refined product sales
margins, higher repair/maintenance expenses in its domestic
business, unfavorable currency movements on derivatives, as well
as increase in the income tax outgo abroad.
Capital Expenditure, Balance Sheet & Share
The second-largest U.S. oil company by market value after Exxon
Mobil spent $12,958.0 million in capital expenditures during the
quarter. Approximately 88% of the total outlays pertained to
As of Dec 31, 2013, the San Ramon, Calif.-based company had
$16,245.0 million in cash and total debt of $20,431.0 million,
with a debt-to-total capitalization ratio of about 12.1%. As part
of the stock repurchase program announced in 2010, Chevron
repurchased $1,250.0 million worth of shares in the fourth
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. A better-ranked stock
in the integrated oil and gas space would be French energy giant
), which hold a Zacks Rank #2 (Buy).