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Chevron Corporation (NYSE:CVX) announced on Friday much-awaited share repurchases in its Q2 earnings release, but investors were disappointed by a miss in profits despite the fact that the U.S. supermajor more than doubled its second-quarter earnings from a year ago.
Chevron reported today earnings of US$3.4 billion, or US$1.78 per share, for the second quarter of 2018, up from US$1.5 billion, or $0.77 per share, for the second quarter of 2017.
The analyst consensus by the Wall Street Journal had expected earnings per share of US$2.09.
Chevron’s worldwide net oil-equivalent production increased to 2.83 million barrels per day in the second quarter of 2018, from 2.78 million barrels per day from the same period last year.
Upstream earnings jumped to US$3.295 billion in Q2 2018, from US$853 million in Q2 2017, mainly boosted by the higher oil prices. U.S. upstream operations earned US$838 million in Q2 2018, compared with a loss of US$102 million a year earlier, while international upstream earnings soared to US$2.46 billion from US$955 million for Q2 2017.
Total downstream earnings dropped to US$838 million from US$1.195 billion, due to lower downstream earnings outside the United States, on the back of lower margins on refined product sales.
Cash flow from operations in the first six months of 2018 rose to US$11.9 billion, compared with US$8.7 billion in the corresponding 2017 period.
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“Second quarter earnings were up significantly from a year ago,” chairman and CEO Michael Wirth said.
“Results in 2018 benefited from higher crude oil prices, strong operations and higher production.”
“Our cash flow continues to improve with higher upstream margins and volumes, combined with disciplined spending,” Wirth noted. “This enables us to initiate share repurchases, which are expected to be $3 billion per year based on our current outlook.”
Chevron’s share buyback announcement was expected by some analysts, and despite the earnings miss, the company’s shares were up 0.36 percent on the NYSE at 10:22 AM EDT on Friday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.