10-QPeriod: Q3 FY2020

CHEVRON CORP Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 5, 2020For Securities:CVX

Summary

Chevron Corporation reported a net loss attributable to Chevron Corporation of $207 million for the third quarter of 2020, a significant decline from the $2.58 billion profit recorded in the same period of 2019. This downturn is primarily attributed to the ongoing impacts of the COVID-19 pandemic, which led to decreased demand for energy products and a sharp drop in commodity prices. For the first nine months of 2020, the company incurred a net loss of $4.88 billion, a stark contrast to the $9.53 billion profit in the prior year. Despite the challenging operating environment, Chevron demonstrated resilience by adjusting its operations and capital expenditures. The company has lowered planned 2020 capital expenditures significantly and is on track to reduce operating costs. Management highlighted a strong balance sheet and sufficient liquidity to navigate the current market conditions and protect shareholder value, including the commitment to maintaining the common stock dividend.

Financial Highlights

47 data points
Beta

Revenue

$24.00B

44.0% Gross Margin

Net Income

-$207.00M

-0.9% Net Margin

EPS (Diluted)

$-0.12

Total Assets

$223.06B

Cash & Equivalents

$7.79B

Free Cash Flow

$3.54B

Financial Statements
Beta
Revenue$24.00B
Cost of Revenue$13.45B
Gross Profit$10.55B
SG&A Expenses$832.00M
Operating Expenses$24.50B
Interest Expense$164.00M
Net Income-$207.00M
EPS (Basic)$-0.12
EPS (Diluted)$-0.12
Shares Outstanding (Basic)1.85B
Shares Outstanding (Diluted)1.85B

Key Highlights

  • 1Reported a net loss of $207 million for Q3 2020, compared to a profit of $2.58 billion in Q3 2019.
  • 2Incurred a net loss of $4.88 billion for the first nine months of 2020, compared to a profit of $9.53 billion in the same period of 2019.
  • 3Revenues and other income significantly declined, driven by lower commodity prices and reduced demand due to the COVID-19 pandemic.
  • 4Upstream segment earnings decreased substantially due to lower crude oil and natural gas realizations and volumes.
  • 5Downstream segment earnings also saw a decline, impacted by lower refined product margins and sales volumes.
  • 6The company has implemented cost-saving measures, including a reduction in planned capital expenditures and operating costs.
  • 7Maintained a commitment to protecting the common stock dividend and a strong balance sheet despite challenging market conditions.

Frequently Asked Questions

The primary driver of Chevron's financial performance in Q3 2020 was the negative impact of the COVID-19 pandemic. This led to significantly lower demand for oil and gas products, resulting in a sharp decline in commodity prices, which in turn negatively affected the company's revenues and profitability.

The COVID-19 pandemic negatively impacted both the Upstream and Downstream segments. Upstream operations saw lower crude oil and natural gas realizations and volumes. Downstream operations experienced reduced refined product margins and sales volumes, particularly for jet fuel and gasoline, due to decreased travel and economic activity.

Chevron is responding by adjusting controllable items. This includes lowering planned capital expenditures by up to 30% for 2020, reducing operating costs, and implementing enterprise-wide transformation initiatives. The company has also suspended its share repurchase program to preserve cash and maintain financial flexibility.

Management anticipates that financial results will likely continue to be challenged in future quarters due to the ongoing impact of the pandemic. However, Chevron entered the crisis with a strong balance sheet and expects to maintain sufficient liquidity. The company is focused on protecting the dividend, prioritizing capital investments, and maintaining a strong balance sheet.