Home Mutual Funds Chevron Posts Revenue, Profit Decline as Lower Natural Gas Prices Hit Margins

Chevron Posts Revenue, Profit Decline as Lower Natural Gas Prices Hit Margins

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Key Takeaways

  • Chevron reported first-quarter results that showed a year-over-year decline in revenue and income.
  • Analysts had projected the decline in recent weeks, citing lower natural gas prices as a factor that could drag down earnings despite high oil prices.
  • Another of Chevron’s main competitors, ExxonMobil, also reported earnings and saw its stock fall slightly premarket Friday.

Chevron (CVX) on Friday reported first-quarter results roughly in line with analyst estimates, which predicted a decrease in revenue and profit from the same time last year.

Chevron reported total revenue of $48.72 billion, just above analyst estimates compiled by Visible Alpha of $48.65 billion. The company made a profit of $5.50 billion, or $2.97 per share, compared with analyst expectations of $5.53 billion and $2.98 per share.

Analysts anticipated the year-over-year decreases because despite higher oil prices, natural gas prices fell in recent months due to increased supply. The analysts also noted something Chevron said in its Friday earnings release, with slimmer refining margins than anticipated also impacting profits.

“First quarter 2024 earnings decreased compared to last year primarily due to lower margins on refined product sales and lower natural gas realizations, partly offset by higher upstream sales volumes in the U.S.,” Chevron said.

The company also announced a dividend of $1.63 per share, set to be paid June 10 to shareholders of record as of the closing bell on May 17. Chevron bumped its dividend to $1.63 from $1.51 earlier this year, paying the first-quarter dividend March 11.

Despite the down quarter, analysts project companies like Chevron and ExxonMobil (XOM), which also reported earnings Friday morning, to return to increasing revenue and profits in the current quarter if oil prices remain higher than last year’s levels.

Chevron shares fell slightly in premarket trading following the publication of its earnings report, after closing Thursday up 1% at $165.28. They are nearly 11% higher this year.

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