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Chevron Posts Narrower Q3 Loss; Looks to Cost Cuts Amid Oil Price Collapse

Chevron, which is moving to reduce it global workforce by around 15%, posted a narrow-than-expected third quarter loss as it continues to focus on cost cuts.

Chevron Corp.  (CVX) - Get Chevron Corporation Report posted a narrower-than-expected third quarter loss Friday, but missed Street forecasts on revenue amid a 30% decline in global oil prices. 

Chevron said its adjusted loss for the three months ending in September was pegged at 11 cents per share, 15 cents inside the Street consensus forecast but a big swing from last year's profit of $1.55 per share. Group revenues fell 33.55% from last year to $24.45 billion, Chevron said, a figure that missed analysts' forecasts of a $25.9 billion tally.

West Texas Intermediate crude prices traded in a range of between $38.70 and $39.70 per barrel over the three months ending in September, a sharp 30% decline from the trading range over the third quarter of last year. 

“Third quarter results were down from a year ago, primarily due to lower commodity prices and margins resulting from the impact of COVID-19,” said CEO Michael Wirth. “The world’s economy continues to operate below pre-pandemic levels, impacting demand for our products which are closely linked to economic activity.”

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 “Compared to last year’s third quarter, organic capital expenditures and operating expenses were down 48% and 12%, respectively,.” he added. "Our actions are guided by our long-standing financial priorities: to protect the dividend, invest for long term value and maintain a strong balance sheet." 

Chevron shares were marked 0.5% higher in early trading immediately following the earnings release at $69.13 each, a move that trims the stock's six-month decline to around 25%.

Chevron said its group capital and exploratory expenses over the first nine months of the year totaled $10.3 billion, a 33% decline from the same period last year. Capital spending over the third quarter was down 48%, Chevron said.

Chevron also said earlier this week that it's cutting around 25% of the workforce at Noble Energy, which it acquired in a $4.1 billion takeover earlier this month, adding to its aim of reducing it global workforce by as much as 15%.

.U.S. rival ExxonMobil Corp.  (XOM) - Get Exxon Mobil Corporation Report said Thursday that it plans to cut some 1,900 jobs at home, while reducing its global headcount by around 15% over the next two years, noting the impact of COVID-19, which has slashed energy demand in key economies around the world, has increased the need for urgent changes in the company's efficiency.