Chevron beats earnings estimates but profit falls on lower refining margins and natural gas prices
all right we’ve got some news out energy
giant Chevron just out with its first
quarter results looks like the profit
came in at
$293 a share on an adjusted EPS basis
that is better than the
$287 that the street was expecting
Revenue was 48.7 billion dollar that’s a
little below the 50.6 billion that the
street had been looking for the instant
reaction on the street right now is for
that stock to be off by about 4/10 of a
percent uh Downstream earnings were down
to 783 uh million dollars that compares
to 1.8 billion from before Upstream
earings were up though 5.23 billion from
5.16 billion U that what we saw in the
quarter before I I spoke with Mike worth
the chairman and the CEO of Chevron
about these numbers and a big point of
Pride for the company is that increase
that they saw in production it was up
12% worldwide for the quarter over a
year ago and it was up 35% in the United
States now the biggest part of that
increase in production in the United
States was the acquisition of PDC energy
but the peran Basin was also responsible
for a huge chunk of the in increase
production in the peran Basin actually
up by 12% and worth tells me that
Chevron is on track to hit production of
a million barrels a day in the perum
next year that’s pretty impressive when
you realize that the production was
under 100,000 barrels per day less than
a decade ago in the perme and worth says
that he thinks Chevron is still
relatively undervalued compared to the
S&P he points to chevron’s dividend
yield of about 4% versus is that 1.3%
that the S&P is yielding but of course
if you look at this um this is Chevron
versus the S&P 500 over the year um up
10% over that time Chevron has
underperformed Exxon Mobile over that
period of time though Chevron just year
to date up 18 a. half% uh we’ll continue
to take a look at some of these things
but does worth adds that Chevron plans
to grow production another four to 7%
this year of course the big question is
where he sees demand and where he thinks
oil prices are headed worth said is that
despite the weak GD print that we got
yesterday and a weaker than expected
manufacturing report this week Global
demand for oil is strong by the way he
thinks US GDP for the year will be
stronger than the 1.6% growth that was
registered in the first read of the
first quarter yesterday worth was in
Washington DC this week he was meeting
with treasury secretary Janet Yellen and
Energy Secretary Jennifer granholm and
geop politics and the potential impact
on oil prices was a huge part of their
conversation worth says Dem land is
strong the market is balanced but just
balanced if there’s any disruption in
the Middle East or Europe the risk is to
the upside that’s what the
administration is concerned about and
I’m concerned about it too he said as
for the other big question hanging over
Chevron what happens with its Hess
acquisition worth says that they expect
approval from the FDC to come within a
few weeks but of course there’s also
that arbitration with Exxon Mobile that
concerns hess’s 30% stake in the Guyana
offshore oil Discovery project that’s a
joint operating agreement with Exxon
Exxon has filed for arbitration to
resolve whether it could preempt
chevron’s purchase of the asset and
offer a competing bid Guyana that asset
that’s the Crown Jewel of the hes
acquisition it is the reason Chevron was
willing to pay the price for HX Hess
Exxon said at a Morgan Stanley
conference recently that they believe
the arbitration process could take five
to six months worth tells me that for a
straightforward interpretation of
contract language we think that sounds
reasonable just in terms of a time frame
Exxon Mobile’s chairman and CEO Darren
Woods is going to be joining us at 7:30
eastern time this morning to talk about
his earnings and of course we will ask
him about the Guyana oil property as
well again that stock right now down by
about 4/10 of a percent
CNBC’s Becky Quick reports on the company’s quarterly earnings results.