Chevron (CVX) posted quarterly earnings below Wall Street estimates on Friday, January 31st, with lower oil and gas prices weighing and weak margins pushing its refining business into a loss for the first time since 2020. Shares dipped over 2% in pre-market trading.
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Total earnings for its Fiscal fourth quarter rose to $3.24 billion from $2.26 billion in the same period last year. However, adjusted earnings per share came in soft at $2.06, below Wall Street’s $2.11 estimate and down from $3.45 a share a year ago.
The company has been hit by weak U.S. fuel sales, which declined 3% year-over-year, as well as softer margins on refined product sales. The decline was primarily due to lower demand for jet fuel in the U.S., partly offset by higher demand for gasoline. Outside the U.S. was better, with refined product sales increasing 8% from the year-ago period primarily due to increased trading volumes.
Having made a profit of $1.15 billion in the same quarter a year ago, the downstream business this year lost $248 million in Fiscal Q4.
While downstream was weak, oil production was steady at 3.35 million barrels of oil equivalent per day as the upstream business posted earnings of $4.3 billion.
“In 2024, we delivered record production, returned record cash to shareholders and started up key growth projects,” said CEO Mike Wirth.
CVX Results Don’t Answer Everything
While the company hailed a record year, investors in CVX are seeking further clarity on a number of key topics. First is the acquisition of Hess (HES), which is going through a lengthy approval process and is still pending. A challenge by Exxon (XOM) and China’s CNOOC, which are Hess’s partners in Guyana, has delayed the planned megamerger, with a decision on the case expected by September.
The deal recently cleared a Federal Trade Commission antitrust review, with the final consent order barring Hess CEO John Hess from the CVX board over allegations he spoke with OPEC as it sought to reduce output.
Secondly, President Trump could hit its production in Venezuela, with the White House indicating the U.S. could halt crude imports from the country. It comes as the president said he wants to press ahead with 25% tariffs on Mexico and Canada on Saturday but indicated that there could be an exemption for oil exports from the two countries. In an interview with the Financial Times, Wirth said the company would lobby the White House to retain its Venezuela licence.
Third, there is some uncertainty about its plans to operate power plants.
Earlier this week CVX said it is teaming up with energy equipment maker GE Vernova (GEV) to build natural gas-fired power plants next to data centers, hoping to tap into surging AI energy needs. DeepSeek aside, this opens up a new revenue stream but will come with a degree of uncertainty.
Is CVX a Buy?
Overall, Wall Street has a Strong Buy consensus rating on CVX stock, based on 16 Buys and three Holds. The average CVX price target of $175.56 implies 12% upside from current levels, with the stock having risen 10% in the last 12 months.
