10-QPeriod: Q1 FY2021

CHEVRON CORP Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:CVX

Summary

Chevron Corporation's Q1 2021 report indicates a decrease in net income attributable to the company, falling to $1.377 billion from $3.599 billion in the same period of 2020. This decline was driven by lower earnings in the Downstream segment, primarily due to reduced refining margins, and a decrease in the Upstream segment, influenced by unfavorable foreign currency effects and lower sales volumes, despite higher crude oil realizations. Despite the lower net income, the company saw an increase in total revenues and other income to $32.029 billion from $31.501 billion year-over-year. Cash flow from operations remained strong at $4.196 billion, though slightly down from $4.722 billion in Q1 2020. Capital expenditures were reduced significantly to $1.746 billion from $3.133 billion, contributing to an increase in free cash flow. The company also increased its quarterly dividend, signaling confidence in its financial position and commitment to shareholder returns.

Financial Highlights

47 data points
Beta

Revenue

$31.08B

43.5% Gross Margin

Net Income

$1.38B

4.4% Net Margin

EPS (Diluted)

$0.72

Total Assets

$241.65B

Cash & Equivalents

$8.26B

Free Cash Flow

$4.20B

Financial Statements
Beta
Revenue$31.08B
Cost of Revenue$17.57B
Gross Profit$13.51B
SG&A Expenses$990.00M
Operating Expenses$29.85B
Interest Expense$198.00M
Net Income$1.38B
EPS (Basic)$0.72
EPS (Diluted)$0.72
Shares Outstanding (Basic)1.91B
Shares Outstanding (Diluted)1.92B

Key Highlights

  • 1Net income attributable to Chevron Corporation decreased to $1.377 billion in Q1 2021 from $3.599 billion in Q1 2020.
  • 2Total revenues and other income increased to $32.029 billion from $31.501 billion year-over-year.
  • 3Upstream segment earnings declined to $2.350 billion from $2.920 billion, impacted by foreign currency effects and lower volumes, though higher crude oil prices provided some offset.
  • 4Downstream segment earnings significantly decreased to $5 million from $1.103 billion, primarily due to lower refining margins.
  • 5Cash provided by operating activities was $4.196 billion, a slight decrease from $4.722 billion in the prior year's quarter.
  • 6Capital expenditures were reduced to $1.746 billion from $3.133 billion, leading to higher free cash flow of $2.450 billion.
  • 7The company increased its quarterly dividend by $0.05 per share to $1.34 per common share, payable in June 2021.

Frequently Asked Questions

The primary reason for the decrease in net income was a significant drop in earnings from the Downstream segment, largely due to lower margins on refined product sales. Additionally, the Upstream segment's earnings decreased due to unfavorable foreign currency effects, lower sales volumes, and the absence of a gain on asset sales recorded in the prior year, which more than offset higher crude oil realizations.

Chevron generated $4.196 billion in cash from operating activities, a slight decrease from $4.722 billion in the prior year. Notably, capital expenditures were substantially reduced to $1.746 billion from $3.133 billion in Q1 2020. This combination resulted in an increase in free cash flow to $2.450 billion.

Chevron acknowledges that while demand and commodity prices have shown signs of recovery, demand has not returned to pre-pandemic levels. The company anticipates that financial results could continue to be challenged in future quarters due to ongoing uncertainty and unpredictability surrounding the pandemic's impact on its operations and the global marketplace.

Chevron is investing approximately $3 billion through 2028 to advance its energy transition strategy. This includes investments in carbon reduction projects, renewables and offsets, and low-carbon technologies through its Future Energy Fund II. The company has also set ambitious 2028 greenhouse gas (GHG) intensity targets for its upstream operations, aiming for significant reductions in oil and gas production GHG intensity, methane intensity, and flaring intensity, with a goal of no routine flaring by 2030.