Chevron: Analysts Expect Higher Q3 Earnings

Chevron (CVX) is expected to post its third-quarter results on November 2. Before we proceed with the company’s third-quarter estimates, let’s recap its second-quarter performance versus the estimates.

In the second quarter, Chevron’s revenues missed Wall Street analysts’ estimate by 7%. Chevron’s adjusted EPS was $1.8, which missed the estimated EPS of $2.1 by ~15%. The company’s second-quarter adjusted EPS was 96% higher than its adjusted EPS in the second quarter of 2017.

In the second quarter, Chevron’s reported earnings stood at $3.4 billion—compared to $1.5 billion in the second quarter of 2017. The increase in the company’s earnings YoY (year-over-year) was due to the rise in upstream earnings and partially offset by the fall in downstream earnings. The second-quarter earnings included a $265 million foreign exchange gain and $270 million of a write-down of receivables.

In the third quarter, according to Wall Street analysts’ estimate, Chevron is expected to post an EPS of $2.1—144% higher than its adjusted EPS in the third quarter of 2017 and 17% higher than its second-quarter adjusted EPS. Chevron’s revenues are expected to be ~$46.7 billion in the third quarter, which is 29% higher than its revenues in the third quarter of 2017.

Chevron’s earnings could rise in the third quarter due to higher upstream earnings. In the third quarter, average crude oil prices have been higher YoY. However, refining cracks have narrowed in the third quarter compared to the third quarter of 2017, which could impact Chevron’s downstream earnings. In the next part, we’ll review the segmental earnings expectations.

ExxonMobil (XOM), Royal Dutch Shell (RDS.A), and BP (BP) are also expected to post 26%, 53%, and 40% higher EPS in the third quarter compared to the third quarter of 2017. Total (TOT) and Suncor Energy’s (SU) EPS will likely be 33% and 91% higher YoY in the third quarter.