01—Abstract
Summary
Summary of the 10-Q filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Chevron Corporation reported a decrease in net income for the first quarter of 2024 compared to the same period in 2023, with earnings attributable to Chevron Corporation at $5.5 billiona ($2.97 per diluted share) versus $6.6 billion ($3.46 per diluted share) in Q1 2023.
This decline was primarily driven by lower margins in the downstream segment and reduced natural gas realizations globally, despite an increase in upstream sales volumes, particularly in the U.S., partly due to the acquisition of PDC Energy. While overall revenues saw a slight decrease, the company demonstrated resilience in its upstream operations, with earnings largely stable year-over-year. Capital expenditures increased year-over-year, reflecting investments in upstream growth, including post-acquisition spend.
Chevron also continued its commitment to shareholder returns, paying significant dividends and repurchasing shares. The company is navigating a complex global energy landscape, including geopolitical uncertainties and the ongoing energy transition, while focusing on delivering higher returns and lower carbon intensity.
02—Key points
Key Highlights
- Net income attributable to Chevron Corporation decreased to $5.5 billion in Q1 2024 from $6.6 billion in Q1 2023.
- Diluted earnings per share declined to $2.97 in Q1 2024 from $3.46 in Q1 2023.
- Upstream segment earnings remained strong at $5.2 billion, slightly up from $5.16 billion in Q1 2023, driven by U.S. volumes.
- Downstream segment earnings significantly decreased to $783 million from $1.8 billion year-over-year, primarily due to lower refined product margins.
- Operating cash flow was $6.8 billion in Q1 2024, down from $7.2 billion in Q1 2023.
- Capital expenditures increased to $4.1 billion in Q1 2024 from $3.0 billion in Q1 2023, driven by upstream investments.
- The company paid $3.0 billion in dividends to common stockholders in Q1 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 2, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $46.58B$48.84B | −4.6% |
| Cost of Revenue | $27.74B$29.41B | −5.7% |
| Gross Profit | $18.84B$19.43B | −3.1% |
| SG&A Expenses | $1.01B$881.00M | +14.6% |
| Operating Expenses | $40.79B$41.27B | −1.2% |
| Interest Expense | $118.00M$115.00M | +2.6% |
| Net Income | $5.50B$6.57B | −16.3% |
| EPS (Basic) | $2.99$3.48 | −14.1% |
| EPS (Diluted) | $2.97$3.46 | −14.2% |
| Shares Outstanding (Basic) | 1.84B1.89B | −2.6% |
| Shares Outstanding (Diluted) | 1.85B1.90B | −2.7% |
05—Questions
Frequently Asked Questions
What drove the decrease in net income for Chevron in the first quarter of 2024?
The decrease in net income was primarily driven by lower margins in the Downstream segment, which saw a significant decline in earnings, and lower natural gas realizations across the company. While Upstream segment earnings were relatively stable due to increased U.S. volumes, the decline in Downstream significantly impacted overall profitability.
How did the acquisition of PDC Energy affect the company's results?
The acquisition of PDC Energy contributed to higher sales volumes in the U.S. Upstream segment, positively impacting production figures. This acquisition also led to increased depreciation, depletion, and amortization expenses, and related post-acquisition capital expenditures.
What is Chevron's strategy regarding the energy transition and lower carbon initiatives?
Chevron is focused on delivering higher returns, lower carbon intensity, and superior shareholder value. The company plans to grow its oil and gas business, lower the carbon intensity of its operations, and expand lower carbon businesses in renewable fuels, carbon capture, hydrogen, and other emerging technologies. They are making investments in areas like solar-to-hydrogen production and carbon capture technology.
How is Chevron managing its capital expenditures and shareholder distributions?
Chevron increased its capital expenditures to $4.1 billion in Q1 2024, largely due to upstream investments following the PDC acquisition. The company remains committed to shareholder returns, having paid $3.0 billion in dividends in Q1 2024 and continuing with share repurchases, although these are subject to certain restrictions related to the pending Hess Corporation acquisition.
06—Continue