Chevron’s Lower Earnings Disappoint Wall Street

Chevron’s (CVX) earnings, on a reported basis, have fallen 36% YoY to $2.6 billion in the third quarter. The company released its results today. The results translated to an EPS of $1.36. Analysts expected the company’s earnings to fall 31% YoY. They also expected Chevron’s EPS to be $1.45. So, the company had a lower-than-expected performance.

As a result, Chevron stock is trading 1.3% lower today. Also, the company’s lower upstream output growth might have impacted the stock. In contrast, ExxonMobil (XOM) reported better-than-expected results today. ExxonMobil stock is trading 1.5% higher today.

However, Chevron’s earnings included special items like tax charges and foreign currency effects. Excluding these special items, the company’s EPS was $1.55—higher than the estimate of $1.45.

Chevron’s earnings fell in Q3

Chevron’s adjusted earnings fell 37% YoY to $2.9 billion in the third quarter. The upstream and downstream segment’s earnings fell 39% YoY and 22% YoY, respectively, in the third quarter.

Chevron’s Lower Earnings Disappoint Wall Street

Chevron’s adjusted upstream earnings fell from $4.4 billion in the third quarter of 2018 to $2.7 billion in the third quarter. The lower upstream earnings were mainly due to a decline in oil and gas realizations in the quarter. Also, the company’s hydrocarbon production rose marginally by 2.6% YoY to 3.03 million barrels of oil equivalent per day.

The weaker production growth was a bit of a dampener. Chevron posted a record rise in its volumes in the previous quarter. In the third quarter, the production rose due to higher output from Permian, Big Foot, and Hebron. The increase was offset by the impact of divestments and Hurricane Barry.

Chevron’s adjusted downstream earnings fell from $1.0 billion in the third quarter of 2018 to $0.80 billion in the third quarter. Weaker margins on refined product sales impacted the company’s domestic operation. However, acquiring the Pasadena refinery raised Chevron’s throughput 8% YoY domestically. Likewise, refined product sales rose 5% YoY.

In contrast, Chevron’s refined product sales fell 5% internationally. The throughput also fell due to stake sales at the Cape Town refinery and maintenance activities at the Singapore refinery.

Peers’ performance

ExxonMobil posted a 53% YoY fall in its earnings in the third quarter—lower than analysts’ expectation of a 54% decline. However, the company’s upstream, downstream, and chemical earnings fell in the quarter. While the company’s chemicals earnings fell 66% YoY, its upstream and downstream earnings fell 49% and 25% YoY, respectively. To learn more, read ExxonMobil Earnings Beat the Estimate, Stock Rose.

BP’s (BP) earnings fell 41% YoY in the third quarter, which was lower than analysts’ estimate. The company’s profits in the upstream segment fell due to a decline in oil and gas realizations. The decline was partially offset by a rise in BP’s volumes. In the last quarter of 2019, the company expects better upstream production due to completed turnaround activities. Today, the stock is trading about 1.3% higher.

Royal Dutch Shell (RDA.S) surprised analysts with an earnings beat. The company’s downstream and integrated gas earnings also rose. Shell announced dividends and its next tranche of the share buyback program. The stock has risen 0.9% today.

So, only Chevron stock is trading down today. In contrast, its peers including ExxonMobil, Shell, and BP are trading up.