Chevron’s second-quarter segment earnings: Upstream
Chevron (CVX) posted its Q2 2018 earnings on Friday, July 27. It missed Wall Street analysts’ estimates. For more on that, please refer to Chevron’s Q2 Earnings Rise but Miss Estimates. Let’s look at Chevron’s earnings by segment.
Chevron’s (CVX) earnings improved in the second quarter compared to Q2 2017. Its adjusted upstream segment earnings rose from $1 billion in Q2 2017 to $3.3 billion in Q2 2018. Upstream earnings rose due to a higher hydrocarbon production coupled with better oil prices.
Chevron’s average crude oil realizations in the United States rose from $45 per barrel in Q2 2017 to $65 per barrel in Q2 2018. Its upstream production grew from 2.78 MMboepd (million barrels of oil equivalent per day) in Q2 2017 to 2.83 MMboepd in Q2 2018.
Downstream earnings fell
Chevron’s adjusted downstream earnings fell 33% YoY (year-over-year) to $794 million in the second quarter. That was mainly due to lower international earnings, which were impacted by the sale of Chevron’s Canadian asset. Domestic downstream earnings rose due to higher margins. Refining throughput fell 8% YoY due to planned turnaround activities.
Overall adjusted earnings rose from $1.7 billion in Q2 2017 to $3.4 billion in Q2 2018. That was led by higher upstream earnings, partially offset by lower downstream earnings.
Chevron’s peer performances
Chevron’s peer ExxonMobil’s (XOM) upstream earnings increased from $1.2 billion in Q2 2017 to $3 billion in Q2 2018. Royal Dutch Shell’s (RDS.A) adjusted upstream earnings rose from $0.3 billion in Q2 2017 to $1.5 billion in Q2 2018. BP (BP) was also expected to see a steep surge in earnings in the second quarter due to higher oil prices.
Next, we’ll review Chevron’s stock performance after its Q2 2018 earnings release.