Chevron Corp (CVX.N) on Friday posted its highest quarterly profit in eight years on surging oil and gas prices, higher output and a recovery in motor fuel demand that boosted refining margins.
The strong results came a day after United States lawmakers grilled top executives of major oil companies over the industry’s past dismissals of climate warming and for funding groups that oppose a shift from fossil fuels.
Chevron’s earnings reflect, in part, gains from higher demand after the industry’s deep production cuts last year during the pandemic and production increases. read more
The company posted net income of $6.11 billion, compared with a loss of $207 million a year ago, on sales of oil that fetched nearly twice as much as a year ago and U.S.-produced gas that sold for three times as much.
Shares were up 2% at $115.37 in pre-market trading and have gained more than a third this year. Adjusted earnings per share of $2.96 handily exceeded Wall Street’s estimate of $2.21, according to Refinitiv IBES data.
Cash flow from operations, a closely watched measure, was $8.5 billion in the quarter, “the best ever reported by the company,” Chief Executive Michael Wirth said in a statement.
Overall production rose on the firm’s acquisition of Noble Energy and more production from OPEC partners, Wirth said. It would have been stronger if not for maintenance shut-ins at Kazakhstan’s giant Tengiz field.
Strong international results pushed Chevron’s operating profit from oil and gas production to $5.1 billion, from just $235 million a year ago. Profits in U.S. refining and chemicals jumped more than six times from a year-ago on higher demand for chemicals and motor fuels.
Results are “boding well for higher shareholder returns,” said Palissy Advisors analyst Anish Kapadia. High demand for liquefied natural gas and strong U.S. refining margins delivered the best results in over four years, he said.
Chevron and U.S. rival Exxon Mobil Corp. have doubled down on oil production, shunning European competitors’ shift into solar and wind. Exxon also is expected to report strong quarterly results on Friday.
Chevron, the No. 2 U.S. oil producer, plans to increase oil and gas output through 2025 by up to 3% annually.
Reporting by Sabrina Valle in Houston and Arathy S Nair in Bengaluru; Editing by Jason Neely, Clarence Fernandez and Steve Orlofsky