Chevron earnings fall but shareholders see record windfall in 2023, company raises dividend 8%
- Chevron's quarterly profit fell sharply, hurt by lower oil prices and several charges, but it outpaced analyst estimates.
- The company's board approved an 8% increase in the quarterly dividend to $1.63 beginning in March.
- Chevron produced 3.1 million oil-equivalent barrels per day in 2023, led by 14% growth in the U.S as the company boosted its capital expenditures.
Chevron said its fourth-quarter profit fell sharply from a year ago, weighed down by a number of impairment charges, but the second-largest U.S. oil company still to managed to return a record amount of cash to its shareholders in 2023.
The oil major returned $26.3 billion to investors by paying out $11.3 billion in dividends and buying back $14.9 billion in shares last year. It did so even as its profit dropped about 40% to $21.4 billion from $35.5 billion in 2022.
"Almost 10% of our market capitalization was returned to shareholders last year," Chevron CEO Michael Wirth told CNBC's "Squawk on the Street" on Friday.
Chevron said its board approved an 8% increase in the quarterly dividend to $1.63 beginning in March.
The company's stock rose more than 3% in morning trading Friday.
Here's what Chevron reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $3.45 adjusted vs. $3.21 expected
- Revenue: $47.18 billion vs $51.62 billion expected
Chevron's net income fell 65% to $2.3 billion, or $1.22 per share, during the quarter, from $6.4 billion, or $3.33 per share, a year ago.
In the latest period, Chevron's U.S. oil and gas assets recorded a loss of $1.35 billion due to the impact of $1.8 billion in impairment charges and a hit of $1.9 billion associated with obligations to decommission previously sold assets in the Gulf of Mexico.
Excluding the impairment charges, Chevron reported an adjusted profit of $3.45 per share to beat Wall Street's estimate of $3.21 per share for the quarter.
"Our balance sheet is rock solid with single-digit net debt," Wirth said. "We're built for a $50 world. We can cover our dividend, our capital spending at a much lower oil price. And in an environment like we see, we've got plenty of capacity to continue to return cash to shareholders."
Chevron's refining profit fell to $1.15 billion in the quarter, down 35% compared to the same period a year ago when downstream booked earnings of $1.77 billion. The segment sagged as U.S. refining profit fell due to lower margins on product sales.
Crude oil prices were volatile in 2023, with West Texas Intermediate and Brent falling more than 10% for the year on a weakening Chinese economy and record oil production in the U.S.
Chevron also entered a deal to buy Hess for $53 billion in stock, which will expand the company's footprint in Guyana, a major emerging crude producer.
Chevron produced a record 3.1 million oil-equivalent barrels per day in 2023, led by 14% growth in the U.S as the company boosted its capital expenditures. Production in the Permian Basin stood at record 860,000 barrels per day and is on a path to 1 million bpd in 2025, Wirth said. International production was down slightly by 25,000 barrels per day due to normal field declines.
The company expects production to rise 4% to 7% in 2024.
Chevron's capital expenditures for the quarter rose nearly 16% to $4.4 billion compared with $3.8 billion in the same period a year ago, as the company invested in recently acquired PDC Energy assets and bought a majority stake in the hydrogen fuel project developer ACES Delta.
Correction: Chevron returned $26.3 billion in cash to investors in 2023. An earlier version misstated the figure.
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