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Chevron 8-K Report, Financial Results (Nov 1, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 1, 2024
Period End
November 1, 2024
Security
CVX
In the record · 2016–202610-K1110-Q338-K143

CVX filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 143 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Dec ’19Dec ’19
  2. Leadership change8-K · Jan ’23Jan ’23
  3. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.

Chevron reported unaudited third quarter 2024 earnings of $4.5 billiona ($2.48 per diluted share), down from $6.5 billion ($3.48 per share) in the year-ago quarter, and adjusted earnings of $4.5 billion ($2.51 per share) versus $5.7 billion ($3.05) a year earlier.

The decline was driven mainly by lower refined product margins, lower crude and gas realizations, and the absence of prior-year favorable tax items. Cash flow from operations was $9.7 billionb, flat year over year, while free cash flow was $5.6 billion. Shareholder returns were the headline: the company returned a record $7.7 billion in the quarter, including $4.7 billion of buybacks and $2.9 billion of dividends, and declared a quarterly dividend of $1.63 per share.

Operationally, net oil-equivalent production rose 7 percent year over year to 3.364 million barrels per day, helped by record Permian Basin output and the PDC Energy acquisition. Chevron started up the Anchor, Jack/St. Malo and Tahiti projects in the U.S. Gulf of Mexico, with the goal of reaching 300,000 barrels per day there by 2026. Portfolio actions include a $6.5 billionc sale of Canadian oil sands and Duvernay assets, with asset sales in Canada, Congo and Alaska expected to close in Q4 2024 as part of a $10-15 billion divestiture plan through 2028.

Leverage rose, with the net debt ratio climbing to 11.9% from 8.1% a year earlier and total debt reaching $25.8 billiond. The company also cleared FTC antitrust review of its pending Hess merger and is targeting $2-3 billion in structural cost reductions by the end of 2026.

For investors, the key takeaways are weaker earnings in a softer refining and pricing environment, strong operational execution and production growth, and a capital return program that exceeded free cash flow in the quarter and was funded partly by higher borrowing. Note that the figures are unaudited and that the filing's forward-looking statements carry significant risk, including the pending Hess transaction and its arbitration proceedings.

02—Key points

Key Highlights

  1. Net income of $4.5B ($2.48/diluted share) fell from $6.5B ($3.48) in Q3 2023; adjusted EPS was $2.51 versus $3.05, mainly on lower refined product margins and realizations.
  2. Record $7.7B returned to shareholders in the quarter: $4.7B in share repurchases and $2.9B in dividends, plus a declared $1.63/share quarterly dividend.
  3. Cash flow from operations was $9.7B (flat year over year), and free cash flow was $5.6B; excluding working capital, FCF was $4.2B.
  4. Oil-equivalent production rose 7% year over year to 3.364 MMBOED, led by record Permian output and the PDC Energy acquisition.
  5. Started up Anchor, Jack/St. Malo and Tahiti in the U.S. Gulf of Mexico; targets 300,000 BOED from the region by 2026.
  6. Announced a $6.5B sale of Canadian oil sands and Duvernay assets, with Canada, Congo and Alaska sales expected to close in Q4 2024 under a $10-15B divestiture plan through 2028.
  7. Net debt ratio rose to 11.9% from 8.1% a year earlier as total debt climbed to $25.8B; the company is also targeting $2-3B in structural cost reductions by end-2026.

03—Questions

Frequently Asked Questions

  1. Why did Chevron's earnings decline versus last year?

    Q3 2024 earnings fell to $4.5B from $6.5B mainly because of lower margins on refined product sales, lower crude and natural gas realizations, and the absence of favorable tax items recorded in the prior year. U.S. Downstream earnings dropped sharply, from $1.4B to $146M.

  2. Is Chevron's shareholder payout sustainable given the cash flow?

    In Q3 2024 shareholder returns of $7.7B exceeded free cash flow of $5.6B, and net debt rose. Year to date, free cash flow was $10.7B against $8.9B in dividends and $10.7B in buybacks. The gap was funded mainly by a $5.0B net increase in debt, which lifted the net debt ratio to 11.9%. Investors should watch whether buybacks are sustained at this pace.

  3. What is the status of production growth and new projects?

    Production rose 7% year over year to 3.364 MMBOED, driven by record Permian output and the PDC acquisition. Anchor, Jack/St. Malo and Tahiti started up in the Gulf of Mexico, and Chevron expects Gulf output to reach 300,000 BOED by 2026 as more projects come online through 2025.

  4. What portfolio changes and cost actions is Chevron making?

    Chevron agreed to sell its Canadian oil sands and Duvernay assets for $6.5B, with that deal and the Canada, Congo and Alaska sales expected to close in Q4 2024. The company plans to divest $10-15B of assets by 2028 and targets $2-3B in structural cost reductions from 2024 levels by the end of 2026.

  5. What are the main risks flagged in this filing?

    The filing flags commodity price and margin volatility, operational and project start-up risks, and environmental and climate regulation. It also flags the pending Hess merger, including the Stabroek arbitration over preemptive rights, which could delay or prevent closing. The Q3 figures are unaudited, and the filing's forward-looking statements are subject to the risks listed in Chevron's 2023 Form 10-K.

04—Continue

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