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Chevron Corporation (NYSE: CVX) reported its financial results for the third quarter of 2024, showcasing a solid performance amidst challenging market conditions. The company reported earnings of $4.5 billion, equivalent to $2.48 per diluted share. This marks a decrease from the $6.5 billion, or $3.48 per share, reported in the same quarter of the previous year. Despite the decline, Chevron maintained robust cash flow from operations, generating $9.7 billion, consistent with the same period last year.

Chevron’s upstream segment, which includes oil and gas exploration and production, contributed significantly to the earnings, with $4.6 billion in earnings. This was slightly down from $5.8 billion in the third quarter of 2023. The downstream segment, which involves refining and marketing, reported earnings of $595 million, a notable decline from $1.7 billion in the prior year. The decrease in downstream earnings was primarily attributed to lower margins on refined product sales.

In addition to its financial performance, Chevron achieved several operational milestones during the quarter. The company successfully started production at key projects in the U.S. Gulf of Mexico, including the Anchor, Jack/St. Malo, and Tahiti fields. These projects are expected to significantly boost Chevron’s production capacity in the region, with a target of reaching 300,000 barrels of net oil-equivalent per day by 2026.
 

Chevron Reports Third Quarter Performance, Slightly Outperforms Expectations

Chevron’s third-quarter performance slightly exceeded market expectations. The company reported an earnings per share (EPS) of $2.48, marginally above the expected EPS of $2.45. Additionally, Chevron’s revenue for the quarter was $48.9 billion, aligning with the market’s expectations, which were set at the same level. This performance reflects the company’s ability to navigate through fluctuating oil prices and other market challenges.

Despite the alignment with expectations, Chevron’s earnings saw a year-over-year decline, primarily due to lower margins on refined product sales and lower realizations. The absence of favorable tax items that benefited the company in the previous year also contributed to the decrease in earnings. However, the company’s adjusted earnings, which exclude significant non-operational items, were $4.5 billion, or $2.51 per share, indicating a slightly better performance when adjusted for these factors.

The company’s upstream segment benefited from increased production, particularly in the Permian Basin, where Chevron set a new quarterly production record. However, the international upstream earnings were impacted by the absence of prior-year favorable tax and foreign currency effects, resulting in a decrease from the previous year.
 

Chevron Guidance and Strategic Outlook

The company has announced plans to divest $10-15 billion of assets by 2028, with asset sales in Canada, Congo, and Alaska expected to close in the fourth quarter of 2024. These divestments are part of Chevron’s strategy to streamline its operations and focus on high-value assets.

Chevron is also targeting $2-3 billion in structural cost reductions from 2024 by the end of 2026. These cost-saving measures are expected to enhance the company’s financial resilience and support its growth objectives. Additionally, Chevron is advancing its projects in the U.S. Gulf of Mexico, with several projects expected to come online by 2025, positioning the company for increased production and revenue growth in the coming years.

In terms of capital expenditures, Chevron reported a decrease in the third quarter of 2024 compared to the previous year, primarily due to the absence of the third-quarter 2023 acquisition of a majority stake in ACES Delta, LLC. The company continues to focus on disciplined capital allocation, balancing investments in its core oil and gas business with initiatives to lower the carbon intensity of its operations.

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