Finance News

Chevron and Exxon earnings prime estimates given the rebound in oil and gasoline costs

Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Chevron and Exxon reported profits for the second straight quarter on Friday as improved demand for petroleum products and spikes in oil and gas prices fueled operations.

Chevron has also resumed its share buyback program, which signals confidence in its future earnings.

The oil giant earned $ 1.71 per share on an adjusted basis in the second quarter on sales of $ 37.6 billion. Analysts expected the company to make $ 1.59 per share on sales of $ 35.94 billion, according to Refinitiv estimates.

"Our free cash flow was our highest in two years due to solid operational and financial performance and lower capital expenditures," said Mike Wirth, Chairman and CEO of Chevron. "We will resume share buybacks in the third quarter at an expected rate of $ 2-3 billion per year."

In the first quarter of 2021, the company made 90 cents per share on an adjusted basis on sales of $ 32.03 billion.

Exxon also outperformed sales and earnings estimates during the period.

The company made $ 1.10 per share, according to Refinitiv estimates, compared to Wall Street's expectation of 99 cents. At $ 67.74 billion, sales were also above the expected $ 66.81 billion.

In the final quarter, Exxon made a profit and recorded a four-quarter loss series. The company made 65 cents per unlisted share on sales of $ 59.15 billion.

"The positive momentum continued across all of our businesses in the second quarter as the global economic recovery increased demand for our products," said Darren Woods, chairman and CEO.

“We are realizing significant benefits from an improved cost structure, solid operating performance and low procurement costs that combine to generate attractive returns and strong cash flow to fund our capital program, pay dividends and reduce debt. "

The two companies' results are far from the same period a year earlier when the pandemic weakened demand for petroleum products. In the second quarter of 2020, Chevron lost $ 1.59 per share on an adjusted basis on revenue of $ 13.49 billion. Exxon lost 70 cents per share on an adjusted basis on sales of $ 32.61 billion.

Still, the oil giants cautioned about investment plans.

Chevron said it remains disciplined on its capital spending, which this year is down 32% year over year. Exxon said it had spent $ 6.9 billion on capital and exploration spending this year, which is "in line with planned lower activity in the first half of 2020".

The company said it anticipates higher spending on key projects, but noted that total spending for 2021 is expected to be at the lower end of its previously announced targets.

During the depths of the pandemic in 2020, energy companies cut spending when West Texas Intermediate crude oil futures briefly fell into negative territory for the first time on record.

Chevron's net oil equivalent production increased 5% year over year to 3.13 million barrels per day in the second quarter of 2021. The company's U.S. upstream operations were $ 1.4 billion, compared with a loss of $ 2.1 billion for the same period last year. Chevron said the average selling price per barrel of crude oil and natural gas liquids was $ 54, down from $ 19 last year.

Chevron and Exxon stocks were up about 1% during Friday's pre-trading session.

Exxon's oil equivalent production decreased 2% year over year to 3.6 million barrels per day due to increased maintenance activity.

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to get started Try it for free today

Related Articles