Chevron adjusted earnings fall short of estimates
By Josh White
Date: Friday 31 Jan 2025
(Sharecast News) - Texas-based energy giant Chevron reported fourth-quarter earnings of $3.2bn on Friday, an increase from $2.3bn a year earlier, although adjusted earnings of $3.6bn fell short of analyst expectations.
The company cited lower refining margins and weaker crude oil prices as key factors impacting its results.
Adjusted earnings per share of $2.06 missed Wall Street's $2.11 forecast, reflecting continued pressure on fuel sales and refining operations.
The refining segment posted a quarterly loss of $248m, its first in four years, as weaker margins and sluggish jet fuel demand in the US weighed on results.
Domestic fuel sales fell 3% year-over-year, while global refining margins softened amid broader economic headwinds in major consuming markets, including the US and China.
Despite the refining weakness, Chevron said it delivered record oil and gas production in 2024, increasing worldwide output by 7% and US production by 19%.
Growth was driven primarily by expansion in the Permian Basin and the full-year contribution of assets acquired from PDC Energy.
The firm said its major Tengiz project in Kazakhstan also reached key milestones, with production expected to ramp up to one million barrels per day later this year.
Chevron returned a record $27bn to shareholders in 2024 through share buybacks and dividends.
The board approved a 5% increase in its quarterly dividend to $1.71 per share, underscoring confidence in future cash flow.
However, free cash flow in the fourth quarter totaled $4.4bn, falling short of the $7.5bn distributed to shareholders, prompting the company to scale back capital expenditures in 2025.
Chevron's long-term growth strategy remained centred on its pending $53bn acquisition of Hess Corporation, however.
The deal, which would provide access to Hess's lucrative Guyana assets, was facing uncertainty due to an arbitration case filed by ExxonMobil over its right of first refusal on Hess's stake in the Stabroek Block.
A ruling on the case was expected in September, with chief executive officer Mike Wirth indicating there were no ongoing settlement discussions with Exxon.
Looking ahead, Chevron said it expected to navigate oil price volatility and market uncertainties by maintaining capital discipline while advancing key projects in the US and internationally.
"In 2024, we delivered record production, returned record cash to shareholders and started up key growth projects," Mike Wirth said.
"We strengthened our portfolio and committed to reduce costs and maintain capital discipline, positioning us for significant free cash flow growth."
At 0644 EST (1144 GMT), shares in Chevron Corporation were down 2.14% in premarket trading in New York at $152.97.
Reporting by Josh White for Sharecast.com.
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