Chevron reports mixed earnings despite beat in EPS amidst profit decline due to refinery and gas price woes

Chevron reported a decrease in profits for the latest quarter despite exceeding analyst expectations regarding earnings per share. The oil giant’s net income fell by 16%, amounting to $5.5 billion or $2.97 per share, compared with last year’s corresponding period. However, excluding one-time items, Chevron recorded a profit of $2.93 per share which outshined estimates made by analysts in Wall Street’s poll through LSEG (formerly known as FTSE Russell). The decline was attributed to lower sales margins at refineries and reduced natural gas prices impacting earnings from international production units. This report follows a year when oil rates grew over 15% whilst petrol futures jumped by approximately 30%, but the rally failed to lift profits due to other issues in the energy sector, such as plummeted natural gas costs of around 35%. Retail and distribution margins for fuel also fell markedly throughout February-March, surpassing rates logged at equivalent moments during prior years. Chevron’s refining business in America witnessed a fall by more than half to $453 million, whilst earnings from international operations decreased nearly 60% to $330m. The US oil and gas division reported an increase of approximately $2bn due to higher sales volumes; the company produced around 1.57mn barrels daily in America during Q1, representing a surge by about 406k bpd compared with last year’s figures. Chevron attributed this production growth mainly to high output from Permian and Denver-Julesburg basins. International oil & gas earnings fell slightly (by around $32m) as daily productions declined by roughly 39,000 barrels due to maintenance in Nigeria and field declines; however, total worldwide outputs increased significantly by approximately 12% – the highest Q1 production level on record for Chevron. The company’s capital expenditures rose markedly (by around $1bn) from last year’s corresponding period ($3bn), mainly due to investments in oil & gas output and aged properties procured after finishing its PDC Energy buyout a few months ago; this came whilst still providing roughly $3 billion dividends alongside the acquisition of about 2.9bn shares worth nearly $3bn during Q1 alone, although return on capital was lower than last year’s figures (from 14.6% to 12.4%)..