Chevron earnings slide amid record shareholder returns

Chevron reported fourth-quarter earnings of $2.3bn on Friday, or $1.22 per share on a diluted basis, down from $6.4b and $3.33 per share a year earlier.

The energy giant said the quarter’s outturn included $1.8bn in US upstream impairment charges and $1.9bn in decommissioning obligations related to previously-sold assets in the US Gulf of Mexico.

Foreign currency effects also impacted earnings negatively by $479m.

However, looking at adjusted earnings, Chevron reported $6.5bn, or $3.45 per share, compared to adjusted earnings of $7.9bn or $4.09 per share in the same quarter of 2022.

That reflected a decline in earnings primarily due to lower upstream realisations, losses from decommissioning obligations, higher US upstream impairment charges mainly in California, and lower margins on refined product sales.

Despite the challenges, Chevron said it returned a record-breaking $26.3bn to shareholders during 2023, including $11.3bn in dividends - a 3% increase from 2022 - and $14.9bn in share buybacks - a 32% increase.

Chevron's annual worldwide net oil-equivalent production also reached a historic high, surpassing 3.1 million barrels of oil equivalent per day, driven by 14% growth in the US.

“In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history,” said chairman and chief executive officer Mike Wirth.

“We also strengthened our portfolio with traditional and new energy acquisitions to help meet the growing demand for affordable, reliable, and ever-cleaner energy.”

In 2023, the company completed several acquisitions, including PDC Energy and a majority stake in ACES Delta, and agreed to acquire Hess Corporation.

Chevron also noted the addition of about 980 million barrels of net oil-equivalent proved reserves, increased capital expenditures, a debt reduction of more than $4bn, and an 8% increase in the quarterly dividend to $1.63 per share from 11 March.

At 0758 EST (1258 GMT), shares in Chevron Corporation were up 0.85% in premarket trading in New York, at $149.15.

Reporting by Josh White for Sharecast.com.