Chevron Corp’s Stock Falls After Disappointing Q3 Profit

by Warren Seah

Chevron Corp.’s stock (CVX, -0.72%) dropped 1.4% in premarket trading on Friday following the release of its third-quarter financial results. The oil giant reported net income of $6.526 billion, or $3.48 per share, for the quarter, which was a significant decrease from $11.231 billion, or $5.81 per share, in the same period last year.

Adjusted earnings per share came in at $3.05, falling short of the $3.70 consensus estimate provided by FactSet. Revenue for the quarter stood at $51.9 billion, down from $63.5 billion a year ago, but it exceeded the estimated revenue of $51.4 billion.

According to Chevron, the decline in earnings was primarily due to lower upstream realizations and decreased margins on sales of refined products. Additionally, lower commodity prices weighed down the overall revenue figures.

Despite this, worldwide net oil-equivalent production experienced a 4% increase, largely driven by the recent acquisition of PDC Energy Inc. The acquisition, which closed in August with a price tag of $6.3 billion, is expected to strengthen Chevron’s position in the DJ and Permian Basins.

Furthermore, Chevron announced on Monday that it has entered into an all-stock agreement to acquire Hess Corp. (HES) for a total value of $53 billion ($171 per share). This move is anticipated to bolster Chevron’s growth prospects in the future.

Year to date, Chevron’s stock has experienced a decline of 14%, while the S&P 500 index (SPX, -1.18%) has seen a gain of 7.8%.

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