10-QPeriod: Q1 FY2018

CHEVRON CORP Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 3, 2018For Securities:CVX

Summary

Chevron Corporation reported strong financial results for the first quarter of 2018, demonstrating significant year-over-year improvements. Net income attributable to Chevron Corporation surged to $3.64 billion, or $1.90 per diluted share, a substantial increase from $2.68 billion, or $1.41 per diluted share, in the same period of 2017. This growth was primarily driven by robust performance in the Upstream segment, which saw earnings more than double, largely due to higher crude oil and natural gas realizations and increased production volumes. The company's financial health is further supported by a solid cash flow from operations and a stable debt-to-equity ratio. While the Downstream segment experienced a slight decline in earnings due to lower refined product margins, overall segment earnings showed a significant increase, highlighting the company's ability to navigate market fluctuations. Chevron's strategic focus on operational efficiency and its disciplined capital expenditure program, coupled with positive upstream market dynamics, position the company favorably. Investors should note the increase in "Taxes other than on income" due to accounting standard changes, and the ongoing positive momentum in operational performance.

Financial Highlights

48 data points
Beta

Revenue

$35.97B

41.0% Gross Margin

Net Income

$3.64B

10.1% Net Margin

EPS (Diluted)

$1.90

Total Assets

$256.44B

Cash & Equivalents

$6.47B

Free Cash Flow

$5.04B

Financial Statements
Beta
Revenue$35.97B
Cost of Revenue$21.23B
Gross Profit$14.73B
SG&A Expenses$723.00M
Operating Expenses$32.69B
Interest Expense$159.00M
Net Income$3.64B
EPS (Basic)$1.92
EPS (Diluted)$1.90
Shares Outstanding (Basic)1.90B
Shares Outstanding (Diluted)1.91B

Key Highlights

  • 1Net income attributable to Chevron Corporation increased by approximately 35% to $3.64 billion in Q1 2018 from $2.68 billion in Q1 2017.
  • 2Diluted earnings per share rose to $1.90 in Q1 2018 from $1.41 in Q1 2017.
  • 3Upstream segment earnings more than doubled, reaching $3.35 billion in Q1 2018 compared to $1.52 billion in Q1 2017, driven by higher crude oil and natural gas realizations and increased production.
  • 4Total revenues and other income grew to $37.76 billion in Q1 2018 from $33.42 billion in Q1 2017.
  • 5Cash provided by operating activities increased to $5.04 billion in Q1 2018 from $3.78 billion in Q1 2017.
  • 6Dividends paid to common shareholders amounted to $2.12 billion in Q1 2018.
  • 7Assets held for sale increased significantly to $1.20 billion at March 31, 2018, from $640 million at December 31, 2017.

Frequently Asked Questions

The primary driver for the significant increase in net income was the strong performance of the Upstream segment. Higher crude oil and natural gas prices (realizations) and increased production volumes led to a substantial rise in earnings for this segment, more than offsetting a slight decrease in Downstream earnings.

Chevron's cash flow from operating activities saw a significant increase, rising to $5.04 billion in the first three months of 2018 from $3.78 billion in the same period of 2017. This improvement reflects higher earnings driven by improved commodity prices and production levels.

Chevron paid dividends of $2.12 billion to common shareholders in the first three months of 2018 and declared a quarterly dividend of $1.12 per common share for June 2018. The company had an ongoing share repurchase program approved in July 2010, but no shares were acquired under this program in 2015, 2016, 2017, or the first three months of 2018.

Yes, effective January 1, 2018, Chevron adopted ASU 2014-09 (ASC 606) for revenue recognition. A key change in presentation is that excise, value-added, and similar taxes collected on behalf of third parties are no longer included in 'Sales and other operating revenues' but are netted in 'Taxes other than on income.' This change did not materially affect earnings but impacted the presentation of revenue and taxes.