Chevron announces record profits in 2022, $75 billion in buyouts as White House smokes

Chevron (CVX) posted mixed fourth-quarter results early Friday, missing earnings views while beating revenue estimates. However, the energy giant posted record profits and cash flow in 2022 and has already announced that it will launch a massive $75 billion share buyback and increase its dividend. Chevron stock fell slightly on Friday.


Chevron Stock: Earnings

Estimates: Wall Street predicted EPS growth of 69% to $4.33. Analysts estimated sales rose 9% to $52.68 billion.

Earnings: Chevron reported earnings up 60% to $4.09 per share. Revenue rose 17% to $56.47 billion. Full-year earnings in 2022 jumped 128% to $18.83 per share while sales rose 51% to $246.25 billion.

Operating cash flow in 2022 totaled $49.6 billion, compared to $29.2 billion in 2021. Meanwhile, capital expenditure in 2022 was $12.3 billion, compared to 8, $6 billion in 2021.

Over the past three quarters, Chevron has averaged 200% earnings growth over the prior year. In the third quarter, Chevron beat earnings estimates, posting EPS up 88% to $5.56 per share. Sales rose 59% to $66.6 billion in the third quarter.

«We achieved record earnings and cash flow in 2022, while increasing capital expenditures and growing U.S. production to a record level for the business,» CEO Mike Wirth said in a statement Friday.

“We are well positioned to lead traditional and new energy businesses, while delivering higher efficiencies, lower carbon emissions and superior shareholder value,” added Wirth.

At the end of November, the White House eased oil sanctions against Venezuela. The Biden administration, following a human rights deal signed between President Nicolaus Maduro’s administration and opposition negotiators, said it would allow Chevron to resume oil production in the Latin American nation. Chevron can produce oil for six months and can only export it to the United States under the license agreement.

Chevron’s fifth and sixth shipments of Venezuelan crude oil are expected to arrive in the United States soon, Reuters reported on Wednesday.

Chevron Buyback Program

On Wednesday, Chevron announced its $75 billion share buyback program, which represents 20% of outstanding shares, at current price levels. Chevron also increased its quarterly dividend by 6%, to $1.51 per share. The $75 billion buyback program will begin on April 1, 2023 and has no fixed expiration date. Chevron’s previous $25 billion share buyback program began in January 2019 and will end March 31, 2023.

In 2022, the US economy reopened after the Covid pandemic. Russia invaded Ukraine, causing oil and gas prices to skyrocket. This resulted in Chevron, Exxon Mobil (XOM) and other energy stocks led the market as companies posted record profits.

Chevron stock is up more than 50% in 2022 even as the broader stock market declines.

Throughout 2022, President Joe Biden has criticized Exxon Mobil, Chevron and several other major producers for choosing to focus on returning cash to shareholders instead of spending to increase production.

«For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders is certainly an odd way of showing it. White House Deputy Press Secretary Abdullah Hasan tweeted on Wednesday. .

Herringbone stock

Chevron stock fell 1.8% in pre-market Friday. On Thursday, the shares rose 4.6% to 187.37. The stock sits at its 10-week moving average support, below a buy point of 189.78 from a shallow cup base. Aggressive investors could use Monday’s high at 182.55 as an early entry.

Chevron stock ranks 11th in the Oil & Gas-Integrated industry group. CVX shares have a composite rating of 91 out of 99. The stock has a relative strength rating of 84, an IBD Stock Checkup proprietary gauge for stock price movement. The EPS rating is 78.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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