Chevron Stock Flattens Following a Simple Third-Quarter Earnings Beat; Operating Cash Flow Sets a Record

Chevron Stock

After Q3 adjusted earnings and revenues above analyst estimates, Chevron stock was up +2.1% pre-market and may open at a record high on Friday. Although profit fell 3% from its all-time high in Q2 due to more than $600 million in net charges during the quarter, Q3 net income increased to $11.23 billion, or $5.78/share, from $6.11 billion, or $3.19/share in the year-ago period.

Total costs increased 41% to $51.84 billion in the third quarter of 2016, less than the 49% increase in revenue to $66.64 billion. A record $15.3 billion in cash flow from operations and $12.3 billion in free cash flow were reported by Chevron (NYSE:CVX), and the return on capital invested increased to 25%.

Earnings for Q3 in U.S. upstream operations increased to $3.4 billion from $1.96 billion in Q3 of last year, principally as a result of higher realizations and higher volumes, which were only marginally offset by the absence of asset sale profits in the prior-year quarter.

Developments behind Chevron stock  

The third quarter’s profits for U.S. downstream operations increased marginally to $1.29 billion from $1.08 billion a year earlier, primarily as a result of higher margins on sales of refined products. Lower profits from Chevron Phillips Chemical, which is 50% owned by the company, and higher operating costs, primarily related to planned turnarounds, partially offset these gains.

Global net production in the third quarter was 3.03 million barrels per day, with output in the international segment declining by 3% year over year, primarily as a result of the termination of concessions in Thailand and Indonesia. In contrast, production in the United States increased by 4%, primarily the cost of natural gas liquids and crude oil in the Permian Basin produced over 700,000 boe/day in Q2, up 12% year over year and a little bit higher than 692,000 boe/day in Q1.

The usual selling the cost of natural gas liquids and crude oil in the company’s third quarter of operations in the United States increased to $76 per barrel from $58 per barrel in the year-ago quarter, and the average sales price for natural gas increased to $7.05 per million cubic feet from $3.25 per million cubic feet. Chevron’s (NYSE:CVX) stock price return indicates a 58% increase over the previous year and a YTD gain of 49%. Read more about Chevron Stock Went Up After Its CEO Said That The Energy Crisis Was Caused By Moving Too Quickly Away From Fossil Fuels

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