10-Q/APeriod: Q1 FY2022

CHEVRON CORP Quarterly Report (Amendment) for Q1 Ended Mar 31, 2022

Filed May 4, 2022For Securities:CVX

Summary

Chevron Corporation reported a significant increase in financial performance for the first quarter of 2022 compared to the same period in 2021, driven primarily by strong upstream segment earnings. Total revenues surged to $54.37 billion from $32.03 billion year-over-year. Net income attributable to Chevron Corporation reached $6.26 billion, a substantial leap from $1.38 billion in Q1 2021, with diluted earnings per share at $3.22 compared to $0.72. This robust performance is largely attributed to higher crude oil and natural gas prices, which boosted upstream realizations significantly, particularly in the U.S. and international segments. The downstream segment also showed improvement, moving from a loss to profitability, benefiting from better refining margins and strong performance in its chemical joint venture. Operational highlights include increased U.S. upstream production and strong refined product sales volumes. The company also demonstrated strong free cash flow generation of $6.1 billion, enabling continued shareholder returns through dividends and share repurchases. Despite a challenging global environment influenced by geopolitical events and ongoing supply chain disruptions, Chevron maintained its financial discipline, repaying debt and ending the quarter with substantial cash reserves. The company continues to invest in its business while also pursuing lower-carbon initiatives and strategic acquisitions, signaling a forward-looking approach to energy transition and long-term value creation.

Financial Statements
Beta
Revenue$52.31B
Cost of Revenue$33.41B
Gross Profit$18.90B
SG&A Expenses$967.00M
Operating Expenses$45.32B
Interest Expense$136.00M
Net Income$6.26B
EPS (Basic)$3.23
EPS (Diluted)$3.22
Shares Outstanding (Basic)1.94B
Shares Outstanding (Diluted)1.94B

Key Highlights

  • 1Net income attributable to Chevron Corporation more than quadrupled to $6.26 billion in Q1 2022 from $1.38 billion in Q1 2021, with diluted EPS rising to $3.22 from $0.72.
  • 2Total revenues and other income increased by approximately 69.8% to $54.37 billion in Q1 2022 compared to $32.03 billion in Q1 2021.
  • 3Upstream segment earnings dramatically increased to $6.93 billion in Q1 2022 from $2.35 billion in Q1 2021, driven by significantly higher oil and gas price realizations.
  • 4Downstream segment earnings improved significantly, moving from a net loss of $130 million in the U.S. in Q1 2021 to earnings of $486 million in Q1 2022, with international downstream also showing a substantial positive swing.
  • 5Free Cash Flow more than doubled to $6.10 billion in Q1 2022 from $2.45 billion in Q1 2021, supporting shareholder returns and debt reduction.
  • 6The company paid $2.7 billion in dividends to common stockholders in Q1 2022 and repurchased approximately $1.25 billion of common stock.
  • 7Cash and cash equivalents increased substantially to $11.67 billion at March 31, 2022, from $5.64 billion at December 31, 2021, indicating strong liquidity.

Frequently Asked Questions

The significant increase in profitability was primarily driven by substantially higher crude oil and natural gas price realizations across the Upstream segment, which benefited from a strong global energy market. Additionally, improved refining margins and stronger earnings from the Chevron Phillips Chemical Company contributed positively to the Downstream segment's performance.

The Upstream segment saw a dramatic increase in earnings, growing from $2.35 billion to $6.93 billion year-over-year, fueled by higher commodity prices. The Downstream segment also showed a strong turnaround, shifting from a net loss in Q1 2021 to reporting earnings of $331 million in Q1 2022, benefiting from improved margins and chemical operations.

Chevron generated strong free cash flow of $6.1 billion in Q1 2022. The company returned substantial capital to shareholders through $2.7 billion in dividends and $1.25 billion in share repurchases during the quarter. Capital expenditures for the quarter were $2.0 billion, with further investments planned for acquisitions and strategic initiatives, including lower-carbon ventures.

The company faces risks including volatile commodity prices, geopolitical events impacting supply chains and energy markets (such as the conflict in Ukraine), changing government regulations related to climate change, potential environmental liabilities, and ongoing litigation. Supply chain disruptions and inflationary pressures also pose potential challenges.