Exchange: NYSE | Sector: Energy | Industry: Oil Gas Integrated
Q1 2024
Published: May 2, 2024
Earnings Highlights
Revenue of $46.58B down 4.6% year-over-year
EPS of $2.97 decreased by 14.1% from previous year
Gross margin of 31.7%
Net income of 5.50B
"Chevron continues to deliver strong operational performance, maintain cost and capital discipline and consistently return cash to shareholders." - Mike Wirth (CEO)
In Q1 2024, Chevron Corporation reported earnings of $5.5 billion or $2.97 per share, demonstrating continued operational resilience despite softer market conditions. The company maintained a robust cash return to shareholders, having returned $6 billion in cash—a record of eight consecutive quarters exceeding $5 billion in returns. Notably, Chevron’s production surged by over 10% compared to the same quarter last year, attributing much of this growth to the recently acquired PDC Energy assets and organic developments in the Permian Basin. Despite this optimistic operating performance, adjusted earnings fell by $1.3 billion year-over-year due to unfavorable price realizations and decreased refining margins.
Key Performance Indicators
Revenue
46.58B
QoQ: -4.81% | YoY:-4.63%
Gross Profit
14.75B
31.66% margin
QoQ: 3.84% | YoY:-7.30%
Operating Income
5.95B
QoQ: 10.08% | YoY:-22.91%
Net Income
5.50B
QoQ: 143.51% | YoY:-16.32%
EPS
2.99
QoQ: 147.11% | YoY:-14.08%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $46.58 billion, down 4.63% YoY and down 4.81% QoQ.
**Gross Profit**: $14.75 billion, decreased by 7.30% YoY but increased by 3.84% QoQ.
**Net Income**: $5.50 billion, a decrease of 16.32% YoY, with significant recovery of 143.51% QoQ.
**EPS**: $2.99, reflecting a decline of 14.08% YoY, but a strong recovery of 147.11% QoQ.
**Free Cash Flow**: $2.94 billion, largely due to disciplined capex and operational efficiencies.
Chevron's operating income margin stood at 12.78%, showcasing effective cost controls amidst fluctuating prices.
Financial Highlights
- Revenue: $46.58 billion, down 4.63% YoY and down 4.81% QoQ.
- Gross Profit: $14.75 billion, decreased by 7.30% YoY but increased by 3.84% QoQ.
- Net Income: $5.50 billion, a decrease of 16.32% YoY, with significant recovery of 143.51% QoQ.
- EPS: $2.99, reflecting a decline of 14.08% YoY, but a strong recovery of 147.11% QoQ.
- Free Cash Flow: $2.94 billion, largely due to disciplined capex and operational efficiencies.
Chevron's operating income margin stood at 12.78%, showcasing effective cost controls amidst fluctuating prices.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
46.58B
-4.63%
-4.81%
Gross Profit
14.75B
-7.30%
3.84%
Operating Income
5.95B
-22.91%
10.08%
Net Income
5.50B
-16.32%
143.51%
EPS
2.99
-14.08%
147.11%
Key Financial Ratios
currentRatio
1.23
grossProfitMargin
31.7%
operatingProfitMargin
12.8%
netProfitMargin
11.8%
returnOnAssets
2.1%
returnOnEquity
3.42%
debtEquityRatio
0.14
operatingCashFlowPerShare
$3.71
freeCashFlowPerShare
$1.59
dividendPayoutRatio
54.6%
priceToBookRatio
1.83
priceEarningsRatio
13.32
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Operational Excellence and Shareholder Returns:
- Mike Wirth (CEO): "Chevron continues to deliver strong operational performance, maintain cost and capital discipline, and consistently return cash to shareholders."
- Eimear Bonner (CFO): "We reported strong cash flow from operations despite a working capital build, aligning with trends in our historical cash generation."
Production Growth:
- Wirth: "Production was up over 12% from last year, including a significant increase of 35% in the U.S. due to the PDC Energy acquisition."
Future Investments:
- Wirth on renewable investments: "We announced our third Future Energy Fund focused on venture investments in lower-carbon technologies, indicating our commitment to sustainable energy solutions."
Chevron continues to deliver strong operational performance, maintain cost and capital discipline and consistently return cash to shareholders.
— Mike Wirth (CEO)
We expect $4 billion of free cash flow in 2025 and $5 billion in 2026 at a $60 Brent.
— Eimear Bonner (CFO)
Forward Guidance
The management anticipates continued production growth through established projects in the U.S., particularly in the Permian Basin. Chevron aims to maintain its dividend growth trajectory, having increased the dividend per share by 8%. Market conditions are expected to improve with the anticipation of higher affiliate dividends in Q2 2024, and planned significant capital expenditures, particularly associated with the WPMP project, are projected to enhance future free cash flow significantly, with expectations of $4 billion in free cash flow for 2025.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CVX Focus
31.66%
12.80%
3.42%
13.32%
BP
20.00%
12.70%
3.24%
11.81%
SHEL
19.50%
17.10%
3.94%
7.46%
PBR
51.60%
37.80%
5.86%
4.69%
SU
48.10%
18.00%
3.63%
10.13%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Chevron exhibits a credible investment outlook thanks to its commitment to shareholder returns, capital efficiency, and advancements in renewable energy. Management's focus on operational excellence should continue to safeguard cash flow and earnings. Competitive performance metrics reflect solid positioning within the energy sector, notwithstanding external market pressures. Investors are encouraged to monitor Chevron’s strategic advancements in renewable energy and developments in existing projects, particularly regarding output from its U.S. assets and the implications of its merger with Hess.
Key Investment Factors
Growth Potential
Chevron's investments in renewable energy and technological ventures position it well for long-term growth as global energy demands evolve.
Profitability Risk
Market volatility and potential regulatory challenges in traditional oil and gas sectors are ongoing concerns, particularly amidst geopolitical uncertainties.
Financial Position
Despite reduced adjusted earnings, Chevron maintains a healthy balance sheet, with low net debt and strong cash generation capabilities.
SWOT Analysis
Strengths
Strong cash flow generation
Robust operational efficiency
Diversified asset portfolio
Growing involvement in renewable energy
Weaknesses
Dependence on oil prices
High operational costs in some regions
Recent downturn in refining margins
Opportunities
Expansion of renewable energy ventures through Future Energy Fund