Earnings Preview: Chevron Corporation (CVX)
By:NewsyStocks   Thursday, January 26, 2022 6:18 PM

Chevron Corporation (CVX) is scheduled to release its fourth quarter earnings on January 27. Weaker downstream earnings along with lower refinery volumes are anticipated to weigh in on earnings this quarter.

Chevron released an interim 4Q update where it stated "Lower margins and refinery input volumes, and the absence of an asset sale gain are expected to reduce downstream earnings significantly compared to third quarter results."

Analysts expect the company to post earnings of $2.92 per share compared to $2.55 in the year-ago quarter.

The company's E&P earnings are expected to be flat sequentially but refinery margins are expected to drop. The company reported that in the first 2 month of Q4, the U.S. refinery crude-input volumes decreased by 180,000 barrels per day.

Merrill Lynch believes that the drivers for a weak quarter are one-off in nature, and that refiners would be likely forgiven for weaker 4Q earnings.

Capital and exploratory expenditures for the first 9 months is also up nearly 34 percent year-over-year.

The company has witnessed increasing profits in all three quarters of FY2011. Profits grew 36.4 percent in the first quarter and 42.9 percent in the second quarter. The most recent reported quarter saw profits grow two-fold.

Revenues also grew in all three quarters increasing 29.1 percent in the first quarter, 30.1 percent in the second quarter, and 29.6 percent in the last quarter.

Our Take

There shouldn't be any surprises tomorrow when Chevron reports earnings given that the company has already issued a profit warning. Peers are also facing the same headwinds so an adverse earnings report should have minimized impact on the stock.