Energy giants Chevron and Exxon Mobil topped Wall Street estimates for first-quarter financials Friday. However both company's saw revenue slip compared to a year ago, as the two U.S. majors come off booming profits in 2022. Chevron stock edged lower early Friday.
Chevron Stock: Earnings
Estimates: Analysts forecast earnings inching up 1% to $3.40 per share in Q1, according to FactSet. Consensus views were than revenue would fall 11% to $48.60 billion.
Results: Earnings gained 6% to $3.55 per share in the first quarter. Meanwhile, Chevron sales slipped 6% to $50.79 billion.
Chevron reported the Q1 profit increase was primarily due to higher margins on refined product sales, which was partially offset by lower upstream realizations.
Worldwide net oil-equivalent production came at 2.98 million oil-equivalent barrels per day in Q1. That's down 3% compared to last year, primarily due to lower international production, according to Chevron.
The company's capital expenditures totaled $3 billion in the first quarter, up 55% vs. a year ago on the back of "higher investment" in the U.S.
Chevron also reported it supplied 8.7 million barrels of crude oil to the U.S. from Venezuela during the first quarter.
Chevron stock dropped 0.6% early Friday during premarket trading. On Thursday, CVX advanced 0.6% to close at 166.95. Chevron stock reclaimed support above its 200-day moving average and 50-day line in March. CVX is consolidating, with a possible handle buy point at 172.98.
Chevron reported a 60% earnings jump to $4.09 per share in Q4, while revenue grew 17% to $56.47 billion. Meanwhile, full-year earnings in 2022 ballooned 128% to $18.83 per share, with sales increasing 51% to $246.25 billion.
Chevron, at its annual investor day in February, reaffirmed plans to raise total oil and gas production by around 3% above current levels by 2027. The company targets annual capital expenditures of $13 billion to $15 billion.
The company's $75 billion buyback program began on April 1, 2023, and does not have a fixed expiration date. Chevron's previous stock buyback program of $25 billion began in January 2019 and ended on March 31, 2023.
Analysts see Chevron's earnings retreating 24% from the highs of 2022 to $14.37 per share in 2023. Wall Street also forecasts sales dropping 13% to $205.42 billion in 2023.
Chevron stock ranks 10th in the Oil & Gas-Integrated industry group. CVX shares have an 80 Composite Rating out of 99. The stock has an 60 Relative Strength Rating. The EPS rating is 77.
Exxon Mobil Earnings
Estimates: Wall Street predicted Q1 EPS growing 26% to $2.60 with sales dropping 5% to $85.65 billion.
Results: Exxon Mobil earnings jumped 36% to $2.83 per share with revenue slipping 4% to $86.56 billion.
The company's net production in the first quarter was 3.8 million oil-equivalent barrels per day up 4% from last year.
Meanwhile, Exxon Mobil's upstream earnings totaled $6.5 billion in Q1, a 20% drop compared to the fourth-quarter 2022, but a 45% jump from last year.
Exxon reported the main drivers of this sequential quarterly drop was lower prices, with crude and natural gas realizations down 10% and 23%, respectively.
As Chevron stock moved lower, Exxon Mobil stock advanced 0.3% early Friday. On Thursday, XOM advanced 1.2% to 116.87. On Monday, Exxon Mobil broke out of a cup-with-handle base with a buy point of 117.28, according to MarketSmith. The buy zone extends to 123.14.
In early February, Exxon Mobil reported Q4 EPS growing 66% to $3.40 while revenue shot up 12% to $95.43. In 2022, Exxon Mobil earnings skyrocketed 160% to $14.06 per share. Sales rose 45% to $413.68 billion.
Exxon reported a cash balance of $29.7 billion at the end of Q4, after having $30.4 billion at the end of Q3. The company's cash balance ended 2022 almost 350% over the $6.8 billion reported at the start of the year.
The energy giant's free cash flow came in at $62.1 billion in 2022, an increase of nearly $23 billion. Exxon Mobil returned a total of $29.8 billion to shareholders through dividends and buybacks. The company added that it will return up to $35 billion to shareholders in 2023.
Exxon Mobil CEO Darren Woods said the company "clearly benefited from a favorable market" in 2022.
Analysts predict full-year 2023 earnings falling 27% to $10.17 per share. Sales are expected to retreat 10% to $373.48 billion.
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The Plan Beyond 2023
Exxon Mobil announced its five-year corporate plan in early December, reporting it expects to maintain its annual capital expenditures at $20 billion to $25 billion through 2027. The oil giant is also planning to increase its share buyback program to $50 billion through 2024.
Along with keeping its annual capital expenditures level through 2027, Exxon Mobil also plans to grow its carbon-emissions-cutting investments to around $17 billion through the same period. This represents nearly a 15% increase from current levels. Exxon's capital investments in 2023 will be in the range of $23 billion to $25 billion.
Exxon Mobil is also reportedly interested in buying Pioneer Natural Resources.
Exxon Mobil stock ranks second, well ahead of Chevron stock, in the Oil & Gas-Integrated industry group. XOM shares have a 91 Composite Rating out of 99. The stock has a 90 Relative Strength Rating. The EPS rating is 79.
What Analysts Project For Chevron Stock And Exxon
Ahead of first-quarter earnings, FactSet forecasts show 2023 profits for both Chevron and Exxon Mobil retreating more than 20% from the highs of 2022. Last year, as the U.S. economy recovered from the Covid pandemic, Russia invaded Ukraine in February, sending oil, gasoline and natural gas prices soaring.
This resulted in oil companies posting record profits, with Chevron, Exxon Mobil and other energy stocks leading the market.
On April 13, Scotiabank analyst Paul Cheng downgraded Exxon Mobil to sector perform, down from outperform. Cheng also cut the Exxon Mobil stock price target to 135, from 140.
Meanwhile, Cheng upgraded Chevron to outperform, up from sector perform. The analyst also hiked the Chevron stock price target to 200, up from 195.
Heading into earnings, Cheng is favoring Chevron stock despite Exxon Mobil being the second-best performer in the S&P 500 Energy Index over the last 12 months. Cheng believes if oil prices rise, Chevron is better positioned and could outperform Exxon Mobil.
Chevron Stock: Oil And Gas Prices
So far in 2023, oil and natural gas prices have dropped considerably vs. 2022. U.S. crude oil futures were around $75 per barrel Friday. Oil had dipped as low as $66.74 in March. Earlier in April, U.S. oil futures hit a five-month high of $83.5 per barrel after a surprise oil production cut from OPEC+.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and key allies such as Russia, announced at the start of April an unexpected crude oil production cut of about 1.15 million barrels a day starting in May.
The price of natural gas also figures prominently in Exxon's and Chevron's earnings performance.
U.S. natural gas prices Friday were around $2.50 per million British thermal units. Natural gas futures undercut the $2 mark in late February 2023 for the first time since September 2020. Natural gas prices have declined 78% from their August 2022 peak of $10.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
