Summary
Chevron Corporation (CVX) reported a significant turnaround in its financial performance for the second quarter and the first six months of 2021 compared to the same periods in 2020. The company transitioned from substantial net losses in the prior year to strong net income, driven by a recovery in commodity prices and improved operational performance across its Upstream and Downstream segments. Total revenues and other income saw a dramatic increase, reflecting higher sales volumes and prices for crude oil and refined products. This financial resurgence provided increased operating cash flow, enabling the company to manage its debt levels and reinstate its share repurchase program.
Financial Highlights
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Financial Statements
Beta
| Revenue | $36.12B |
| Cost of Revenue | $20.63B |
| Gross Profit | $15.49B |
| SG&A Expenses | $1.10B |
| Operating Expenses | $33.17B |
| Interest Expense | $185.00M |
| Net Income | $3.08B |
| EPS (Basic) | $1.61 |
| EPS (Diluted) | $1.60 |
| Shares Outstanding (Basic) | 1.92B |
| Shares Outstanding (Diluted) | 1.92B |
Key Highlights
- 1Net income attributable to Chevron Corporation swung from a loss of $8.27 billion in Q2 2020 to a gain of $3.08 billion in Q2 2021, and from a loss of $4.67 billion in the first six months of 2020 to a gain of $4.46 billion in the first six months of 2021.
- 2Total Revenues and Other Income surged by approximately 179% to $37.6 billion in Q2 2021 from $13.5 billion in Q2 2020, and by approximately 55% to $69.6 billion in the first six months of 2021 from $45.0 billion in the prior year period.
- 3Upstream segment earnings improved dramatically, reporting $3.18 billion in Q2 2021 compared to a loss of $6.09 billion in Q2 2020, driven by higher crude oil realizations and the absence of prior year impairments.
- 4Downstream segment earnings also turned positive, reaching $839 million in Q2 2021 versus a loss of $1.01 billion in Q2 2020, attributed to higher refined product margins and improved equity earnings from joint ventures.
- 5Net cash provided by operating activities more than doubled to $11.15 billion in the first six months of 2021 from $4.80 billion in the comparable 2020 period.
- 6Chevron announced the resumption of its stock repurchase program in Q3 2021, with approximately $19.5 billion remaining authorization.
- 7The company reported increased capital and exploratory expenditures for the first six months of 2021 ($5.3 billion) compared to the prior year ($7.7 billion), reflecting ongoing investments, particularly in the upstream segment.
Frequently Asked Questions
The substantial improvement in Chevron's financial results was primarily driven by a recovery in global commodity prices for crude oil and natural gas, which led to higher realizations and improved margins. This was coupled with the absence of significant impairment charges and write-offs that impacted the prior year's results. Additionally, operational efficiencies and increased sales volumes in both the Upstream and Downstream segments contributed to the turnaround.
While the pandemic continued to present challenges, including disruptions to logistics and potential resurgences of the virus, Chevron's operations showed resilience. Demand and commodity prices had largely recovered by the second quarter of 2021, although demand for certain products like jet fuel remained below pre-pandemic levels. The company continued to implement safety measures and adapt its operations, with projects like the TCO FGP/WPMP proceeding, albeit with revised timelines.
Chevron is focused on delivering higher returns, lower carbon intensity, and superior shareholder value. The company is investing in lower-carbon technologies and has announced targets for reducing its upstream greenhouse gas (GHG) intensity by 2028. Initiatives include investments in renewable diesel, compressed natural gas (CNG) stations, and exploring strategic alliances for hydrogen and other alternative energy sources.
Chevron updated its expectation for 2021 organic capital expenditure spending to around $13 billion. The company paid dividends of $5.0 billion in the first six months of 2021 and declared a quarterly dividend of $1.34 per share. Furthermore, Chevron announced the resumption of its stock repurchase program in the third quarter of 2021, indicating a commitment to returning value to shareholders.