Chevron’s Q3 2023 earnings decline, marked by a drop in net profit due to falling oil prices, contrasts with growth in its global production thanks to strategic acquisitions, while maintaining generous shareholder remuneration.
Significant reduction in net profit
Net income plunged by 42% to $6.53 billion, while sales fell by 18.3% to $51.9 billion. This negative trend is essentially attributed to the fall in oil prices, the consequence of the surge triggered by the conflict in Ukraine the previous year. However, sales were still slightly above the forecasts of analysts surveyed by Bloomberg.
Earnings per Share Below Expectations
Excluding exceptional items, earnings per share came to $3.48, down sharply from $5.78 the previous year. In reaction to these results, Chevron shares fell by 1.1% to $152.9 in electronic trading before the opening of the New York Stock Exchange.
Global Production Growth
Chevron, while posting less favorable results, nevertheless saw its global oil equivalent production rise by 4% year-on-year, largely thanks to the acquisition of US crude oil and natural gas specialist PDC.
In the United States, production of barrels of oil equivalent actually rose by 20% over the quarter, equivalent to an additional 179,000 barrels of oil equivalent per day.
Strategic Acquisitions
In addition, Chevron announced a recent $53 billion acquisition agreement with its American counterpart Hess, active in oil and gas production. Chevron CEO Mike Wirth emphasized that, despite the current challenges, the company continues to generate solid financial results while investing strategically to develop its traditional and new energy businesses, with the aim of creating greater shareholder value.
Generous Shareholder Return
During the quarter, Chevron redistributed $6.2 billion to its shareholders, of which $2.9 billion in the form of dividends and the remainder in the form of share buybacks. Since the beginning of the year, the company has already returned a record $20 billion to its shareholders.
In short, despite economic challenges and falling oil prices, Chevron remains a key player in the energy sector, seeking to maximize shareholder value while continuing to invest in new growth opportunities.
