Chevron Corporation (CVX) delivered impressive third-quarter results, surpassing analysts’ expectations for both revenue and earnings. The energy giant reported revenues and other income of $50.669 billion, beating the consensus estimate of $48.986 billion. This strong performance was fueled by robust production growth and strategic acquisitions.
Chevron’s worldwide net oil-equivalent production soared 7% year-over-year, reaching 3,364 MBOED. This surge was attributed to the acquisition of PDC Energy and strong production in the Permian Basin, a major oil-producing region in the United States.
Despite the impressive top-line performance, adjusted net earnings dipped to $4.53 billion from $5.12 billion a year ago. The decline in earnings was primarily attributed to reduced margins on refined product sales, the absence of favorable tax items from the previous year, and lower realizations.
Despite the earnings decline, Chevron exceeded expectations on a per-share basis. Adjusted EPS reached $2.51 in the quarter, outperforming the consensus estimate of $2.43.
Chevron’s impressive production growth wasn’t limited to the Permian Basin. The company highlighted the start-up of key projects in the Anchor, Jack/St. Malo, and Tahiti fields, which are expected to significantly increase U.S. Gulf of Mexico production. Chevron’s commitment to cost reduction is evident in its target of achieving $2-3 billion in structural cost reductions by the end of 2026.
The company’s focus on shareholder returns was reinforced by a $7.7 billion return of cash to shareholders during the quarter, which included dividends of $2.9 billion and share repurchases of $4.7 billion. Chevron also declared a quarterly dividend of $1.63 per share, payable on December 10, to shareholders of record as of November 18, 2024.
Chevron’s commitment to streamlining its global energy portfolio was demonstrated by its recent agreement to sell a stake in several projects and assets to Canadian Natural Resources for $6.5 billion in cash. This sale is part of the company’s plan to divest $10 billion-$15 billion in assets by 2028.
Investors seeking exposure to Chevron can consider ETFs such as the EA Series Trust Strive U.S. Energy ETF (DRLL) and Westwood Salient Enhanced Energy Income ETF (WEEI).
In pre-market trading on Friday, CVX shares rose 2.07% to $151.90, indicating strong investor confidence in Chevron’s future prospects.
