01—Abstract
Summary
Summary of the 10-Q filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Chevron Corporation (CVX) reported a net income of $4.49 billiona ($2.48 per diluted share) for the third quarter of 2024, a decrease from $6.53 billion ($3.48 per diluted share) in the same period of 2023.
For the first nine months of 2024, net income was $14.42 billionb ($7.88 per diluted share), down from $19.11 billion ($10.14 per diluted share) in the first nine months of 2023. This decline is primarily attributed to lower downstream margins, reduced upstream realizations, and unfavorable foreign currency effects, partially offset by higher sales volumes in the upstream segment. The company's upstream segment experienced a decrease in earnings due to lower realizations and unfavorable tax and foreign currency effects, despite increased production volumes.
The downstream segment saw a significant drop in earnings, largely driven by lower margins on refined product sales. Chevron continues its commitment to shareholder returns, paying $8.9 billionc in dividends and repurchasing $4.7 billion in stock during the third quarter.
Significant operational updates include the announced $6.5 billiond sale of Canadian oil sands and shale assets, expected to close in Q4 2024. The company is also advancing its lower-carbon initiatives and managing costs, targeting $2-3 billion in structural cost reductions by the end of 2026.
02—Key points
Key Highlights
- Net income for Q3 2024 was $4.49 billion, down from $6.53 billion in Q3 2023.
- Diluted EPS for Q3 2024 was $2.48, compared to $3.48 in Q3 2023.
- Upstream segment earnings decreased due to lower realizations and unfavorable currency/tax impacts, despite higher production volumes.
- Downstream segment earnings significantly decreased, primarily driven by lower refined product margins.
- Chevron paid $8.9 billion in dividends and repurchased $4.7 billion in stock during the first nine months of 2024 and Q3 2024, respectively.
- The company announced the $6.5 billion sale of its Canadian oil sands and shale assets, expected to close in Q4 2024.
- Chevron is targeting $2-3 billion in structural cost reductions by the end of 2026.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 7, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $48.93B$51.92B | −5.8% |
| Cost of Revenue | $30.45B$32.33B | −5.8% |
| Gross Profit | $18.48B$19.59B | −5.7% |
| SG&A Expenses | $1.19B$1.16B | +2.4% |
| Operating Expenses | $44.18B$45.34B | −2.6% |
| Interest Expense | $164.00M$114.00M | +43.9% |
| Net Income | $4.49B$6.53B | −31.2% |
| EPS (Basic) | $2.49$3.48 | −28.4% |
| EPS (Diluted) | $2.48$3.48 | −28.7% |
| Shares Outstanding (Basic) | 1.80B1.87B | −3.8% |
| Shares Outstanding (Diluted) | 1.81B1.88B | −3.7% |
05—Questions
Frequently Asked Questions
What were the primary drivers for the decrease in net income compared to the previous year?
The decrease in net income was primarily driven by lower downstream margins on refined product sales and reduced upstream realizations. Additionally, unfavorable foreign currency effects and the absence of prior year favorable tax items contributed to the decline.
How did the Upstream and Downstream segments perform differently in the quarter?
The Upstream segment saw a decrease in earnings due to lower prices and unfavorable currency/tax impacts, though production volumes increased. The Downstream segment experienced a more significant earnings decline, predominantly due to lower margins on refined product sales and higher operating expenses.
What is Chevron's strategy regarding shareholder returns and cost management?
Chevron remains committed to shareholder returns, as evidenced by its substantial dividend payments and ongoing share repurchase program. The company is also actively pursuing cost efficiencies, targeting $2-3 billion in structural cost reductions by the end of 2026 through portfolio optimization and technological enhancements.
Are there any significant asset divestitures or strategic transactions highlighted in this report?
Yes, Chevron announced the sale of its Canadian oil sands and shale assets for $6.5 billion, expected to close in the fourth quarter of 2024. The company is also progressing with its merger agreement with Hess Corporation, though certain regulatory and arbitration conditions remain.
06—Continue