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Chevron Misses Q4 Earnings Forecast as Crude Prices Tumble

Chevron follows larger rival Exxon with weaker-than-expected fourth-quarter profit amid a sharp and extended decline in global crude prices.

Chevron Corp  (CVX)  posted weaker-than-expected fourth quarter earnings Friday, following on from larger rival Exxon Mobil, which posted sharp profit declines amid falling global crude prices.

Chevron said adjusted earnings for the three months ending in December came in at $1.49 per share, that's a 23.6% in from the same period last year but four cents ahead of the Street consensus forecast. Group revenues, Chevron said, fell 17.3% to $35 billion, well shy of analysts' estimates of a $38.6 billion. 

“Cash flow from operations remained strong in 2019, allowing the company to deliver on all our financial priorities,” said CEO Michael Wirth. “We paid $9 billion in dividends, repurchased $4 billion of shares, funded our capital program and successfully captured several inorganic investment opportunities, all while reducing debt by more than $7 billion.”

“Organic capital spending held flat at $20 billion in 2019, further demonstrating our commitment to capital discipline," he added. "For the first time in the company’s history, annual production exceeded 3 million barrels per day of oil equivalent."

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Chevron shares were marked 3.6% lower in early trading following the earnings release to change hands at $107.84 each, extending its six-month decline to around 14%. 

Earlier Friday, Exxon Mobil Corp.  (XOM)  said adjusted earnings for the three months ending in December came in at 41 cents per share, down more than 70% from last year and 2 cents shy of the Street consensus forecast. 

Downstream earnings fell 67% to $898 million as U.S. crude prices fell from a peak of $77 per barrel in September 2018 to around $63 by the end of last year. But upstream earnings rose 65% to $6.14 billion.

Group revenues, Exxon said, fell 6.6% to $67.17 billion, but topped analysts' estimates of a $64.1 billion tally.

Earlier this week, Royal Dutch Shell  (RDS.A) , Europe's biggest oil company, said fourth quarter profits nearly halved from last year, to $2.9 billion, and cautioned the global demand weakness linked to the spreading coronavirus would cloud energy markets for at least the first half of the year.