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Chevron to Post the Highest Earnings Growth in Q4

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Ranking estimated earnings growth

In this series, we’re ranking global integrated energy companies ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) based on their estimated YoY (year-over-year) earnings growth in the fourth quarter. 

Chevron tops the list with its massive jump in earnings, and Shell stands last. ExxonMobil and BP are in second and third, respectively.

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Chevron’s fourth-quarter estimates

In the fourth quarter, as per analysts’ estimates, Chevron is expected to post EPS of $2.0, 183% higher than its adjusted EPS in the fourth quarter of 2017 but 3% lower than its adjusted EPS in the third quarter of 2018. Chevron’s revenue is expected to be ~$46.4 billion in the quarter, 23% higher than its revenue in the fourth quarter of 2017.

Chevron’s upstream earnings could rise YoY in the fourth quarter. Crude oil prices also rose on a yearly basis in the quarter. WTI prices surged from $55 per barrel in the fourth quarter of 2017 to $59 per barrel in the fourth quarter of 2018, which could improve Chevron’s quarterly realizations and lead to higher upstream earnings for the company.

However, its downstream earnings are likely to be dented by narrower refining cracks YoY in the quarter. For example, the US Gulf Coast WTI 3-2-1 crack, the broader market crack indicator, contracted 19% from the fourth quarter of 2017 to $15 per barrel in the fourth quarter of 2018.

Chevron’s global peers

Chevron’s peers Total (TOT) and Petrobras (PBR) are likely to post 31% and 15% YoY rises in their EPS in the fourth quarter. However, Suncor Energy’s (SU) EPS are expected to fall 8% YoY in the quarter.

In the next article, we’ll review the second company in the queue, ExxonMobil.

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