Chevron tops estimates with Q1 profit gain despite slide in oil prices

On Friday, oil major Chevron Corp (CVX.N) surpassed market expectations as first-quarter profit rose, with refining earnings offsetting energy price and production declines.

$6.57 billion, or $3.46 per share, was net profit. According to Refinitiv, results surpassed consensus by 4%. The company’s best business was refining, where improved margins boosted income to $1.8 billion.

Shares fell 0.5% pre-market.

On the other hand, Chevron’s oil and gas production division’s net profit fell 25% due to price declines.

Brent crude, the global oil standard, averaged $82 per barrel in the first three months of the year, down 16% from a year earlier and 7% from the fourth quarter.

“Brent prices are high yet down a lot. “But you are still seeing mid-double-digit returns” for every dollar spent by the company, Chief Financial Officer Pierre Breber told Reuters.

The second-largest U.S. oil company closed the quarter with $15.8 billion in cash, down 12% from a year earlier but $10 billion beyond what it needs to run the business, Breber said.

In case of an economic slump or fresh consolidations, big oil firms are storing extra cash.

Breber stated, “The intent over time is that cash will be returned to shareholders in a steady way,” adding that Chevron will only explore deals that benefit shareholders.

He replied, “We are always looking,” when asked if Chevron was considering purchases. Since we don’t need a deal, we have a high bar.

Capital spending rose 55% to $3 billion, driven by U.S. projects.

Chevron is producing more in the US and less overseas. On contract expiration in Thailand and the sale of South Texas shale properties, total output dropped 3% to 2.98 million barrels of oil and gas per day.

The Permian, the largest US shale field, increased production by 4%. A Gulf of Mexico platform is also being launched by the corporation.