Chevron will slow the pace of its share buybacks, as falling crude prices hit the oil major’s first-quarter profit.
U.S. crude oil prices have dropped about 18% this year as President Donald Trump‘s tariffs are expected to weigh on demand at the same time OPEC+ plans to pump more supply into the market.
The oil major said it plans to repurchase $2.5 billion to $3 billion of its own stock in the second quarter, which is lower than the $3.9 billion it bought back in the first quarter. Chevron, however, is maintaining its overall guidance of $10 billion to $20 billion of repurchases this year.
Chevron shares were basically flat in morning trading.
Here is what Chevron reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $2.18 adjusted vs. $2.18 expected
- Revenue: $47.61 billion vs. $48.09 billion expected
Chevron clearly has room to continue its shareholder returns, Biraj Borkhataria, an analyst at RBC Capital Markets, told clients in a Friday note.
“The reaction from the company today seems to reflect a ‘skate to where the puck is going’ situation, with a recognition that the macro has deteriorated, and could continue to deteriorate further from here,” the analyst said.
Chevron’s net income declined more than 30% to $3.5 billion, or $2 per share, from $5.5 billion or $2.97 per share, in the year-ago period. Excluding one-time items, Chevron earned $2.18 per share, which was in line with Wall Street estimates.
Upstream hit by low oil prices
Chevron’s U.S. production business posted a profit of $1.86 billion, a decline of more than 10% from $2.08 billion in the year-ago period, as it experienced higher operating expenses and lower commodity prices.
On the international front, Chevron’s production segment earned $1.9 billion in the quarter, down nearly 40% from $3.16 billion last year. International profits took a hit due primarily to lower earnings at the company’s TCO project in Kazakhstan.
Chevron produced 3.35 million barrels per day in the quarter, largely flat compared with the 3.34 million bpd in the year-ago period. Capital expenditures declined about 5% to $3.9 billion, down from $4.1 billion one year ago.
Chevron is still trying to close its planned acquisition of Hess. The deal has been stymied as Exxon Mobil challenges Chevron’s move to buy Hess assets in Guyana before an international arbitration court. Chevron acquired $2.2 billion of Hess shares in the quarter.
U.S. refining swings to a profit
The oil major’s U.S. refining business shifted to a profit of $103 million after posting a loss of $348 million in the fourth quarter of 2024. The segment’s earnings, however, declined 77% from $453 million in the year-ago period due to lower margins on refined product sales.
Chevron’s international refining business posted a profit of $222 million, a decline of about 33% from $330 million in the same quarter last year also due to lower margins on product sales.
(Source)