10-QPeriod: Q1 FY2019

CHEVRON CORP Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 2, 2019For Securities:CVX

Summary

Chevron Corporation's first quarter 2019 results showed a decrease in net income attributable to Chevron Corporation to $2.65 billion from $3.64 billion in the prior-year period. This decline was primarily driven by lower crude oil prices and unfavorable foreign currency effects impacting the Upstream segment, which is the company's main earnings driver. While Upstream earnings decreased year-over-year, production volumes, particularly in U.S. shale, showed an increase. The Downstream segment experienced a significant drop in earnings due to lower refined product margins, despite efforts to manage operating expenses. The company also announced a major development outside of this quarterly report: its agreement to acquire Anadarko Petroleum Corporation for approximately $33 billion, a move intended to significantly enhance its upstream portfolio. The company maintained a strong liquidity position and continued its share repurchase program, demonstrating a commitment to returning value to shareholders.

Financial Highlights

46 data points
Beta

Revenue

$34.19B

42.4% Gross Margin

Net Income

$2.65B

7.7% Net Margin

EPS (Diluted)

$1.39

Total Assets

$256.81B

Cash & Equivalents

$8.70B

Free Cash Flow

$5.06B

Financial Statements
Beta
Revenue$34.19B
Cost of Revenue$19.70B
Gross Profit$14.49B
SG&A Expenses$984.00M
Operating Expenses$31.24B
Interest Expense$225.00M
Net Income$2.65B
EPS (Basic)$1.40
EPS (Diluted)$1.39
Shares Outstanding (Basic)1.89B
Shares Outstanding (Diluted)1.90B

Key Highlights

  • 1Net income attributable to Chevron Corporation decreased to $2.65 billion ($1.39 per diluted share) in Q1 2019 from $3.64 billion ($1.90 per diluted share) in Q1 2018.
  • 2Total revenues and other income decreased to $35.2 billion from $37.76 billion in the prior-year period, primarily due to lower sales and other operating revenues.
  • 3Upstream segment earnings decreased to $3.12 billion from $3.35 billion, mainly due to lower crude oil prices and unfavorable foreign currency effects, partially offset by higher crude oil production.
  • 4Downstream segment earnings significantly decreased to $252 million from $728 million, primarily due to lower margins on refined product sales.
  • 5The company paid $2.24 billion in cash dividends to common stockholders in Q1 2019, an increase from $2.12 billion in Q1 2018.
  • 6Chevron repurchased $537 million of its common stock in Q1 2019.
  • 7The company announced plans to acquire Anadarko Petroleum Corporation for approximately $33 billion, subject to shareholder and regulatory approvals.

Frequently Asked Questions

The primary reason for the decrease in net income was the decline in crude oil prices and unfavorable foreign currency effects, which impacted the company's Upstream segment, its largest contributor to earnings. Lower margins in the Downstream segment also contributed to the decline.

Despite lower prices, Chevron saw an increase in its net oil-equivalent production, particularly in the U.S. Upstream segment, driven by shale and tight properties in the Permian Basin. International Upstream production also saw a modest increase. Refined product sales volumes in the Downstream segment remained relatively stable year-over-year.

The announcement of the planned acquisition of Anadarko Petroleum Corporation for approximately $33 billion is a significant strategic move. Chevron anticipates it will substantially enhance its Upstream portfolio and strengthen its positions in key resource basins, aiming for long-term value growth.

Chevron maintained a strong liquidity position, with $8.8 billion in cash, cash equivalents, and marketable securities at the end of the quarter. Operating activities generated $5.1 billion in cash. The company continues to invest in capital expenditures, primarily in its Upstream segment, and returned capital to shareholders through dividends and share repurchases.