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Chevron’s Q4 Earnings Miss Estimates By A Mile

Chevron Corporation (NYSE:CVX) reported on Friday earnings of US$0.22 per share for the fourth quarter, compared with a loss of US$0.31 per share for the fourth quarter of 2015, in line with analyst expectations that it would return to profit, but missing the EPS estimates by a wide margin.

According to analyst estimates compiled by Bloomberg, Chevron was expected to return to profit from a loss a year earlier, so the fourth-quarter profit was not a surprise.

However, analysts had expected much higher EPS. Jefferies Group analyst J. Gammel last week raised his earnings per share (EPS) forecast to US$0.65, up from a previous forecast of US$0.58.

Zacks Equity Research had said that Chevron was likely to beat on Q4 earnings and Wall Street analysts’ estimates had also pegged the EPS at US$0.65 for the fourth quarter. Wall Street had also expected Chevron’s revenues at around US$33.8 billion in the fourth quarter, or 15 percent above the revenues for the fourth quarter of 2015.

But Chevron missed revenue forecasts as well, and reported total revenues of US$31.497 billion for the fourth quarter.

Capital and exploratory expenditures in 2016 were US$22.4 billion, compared with US$34.0 billion in 2015.

Last month Chevron said its capital expenditure would be US$19.8 billion in 2017, down 42 percent on 2015 and at least 15 percent lower than outlays for 2016.

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As of the end of 2016, Chevron had cash equivalents and marketable securities totaling US$7 billion, a decrease of US$4.3 billion from the end of 2015. Total debt was US$46.1 billion at December 31, 2016, an increase of US$7.5 billion from a year earlier.

Commenting on the fourth-quarter results, chairman and CEO John Watson said: “Our 2016 earnings reflect the low oil and gas prices we saw during the year. We responded aggressively to those conditions, cutting capital and operating expenses by $14 billion. We are well positioned to improve earnings and be cash flow balanced in 2017 through continued tight spending and cost control and additional revenue from expected production growth.”

Chevron shares plunged nearly 3 percent in pre-market trade after the results release.

By Tsvetana Paraskova for Oilprice.com

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