Chevron (CVX) stock falls over 4% on Friday despite exceeding revenue forecasts. The company missed EPS expectations and experienced losses in its refining operations.
Chevron ( CVX ) stock declined over 4.5% on Friday afternoon following the release of its fourth-quarter earnings report. Despite exceeding Wall Street's revenue projections, the oil giant fell short of earnings per share ( EPS ) expectations. The company announced adjusted EPS of $2.06 for Q4, missing the average analyst estimate by 5 cents. This performance made CVX the worst-performing stock on the Dow Jones Industrial Average (DJIA) on Friday.
Chevron demonstrated strong revenue growth in Q4, surpassing expectations by $3.82 billion to reach $52.23 billion, representing an 11% increase year-over-year. However, the company experienced losses in its refining operations, a stark contrast to the $1.15 billion profit recorded in the same period last year. Lower margins in its refined products business contributed to a $248 million loss in the downstream segment. Despite these losses, Chevron's global production remained relatively stable at 3.35 million barrels per day compared to the previous year.Looking ahead, management anticipates a 6% annual production growth over the next two years. Chevron also implemented a significant share repurchase program in 2024, buying back approximately 5% of its outstanding shares for over $15 billion. Additionally, the company distributed approximately $12 billion in dividends. Management highlighted potential cost reductions, projecting up to $2 billion annually in savings for 2025 and 2026, which could translate into an additional $10 billion in free cash flow by the end of 2026. Chevron's stock performance has been subdued in recent times, generally trending downward since 2022. The stock traded within a horizontal support range of $136 to $142.50 since last August. Resistance currently lies in the high $150s or low $160s. Traders may initiate buying positions if the stock reaches around $141. While Chevron's business may appear unspectacular, its substantial investments in buybacks and dividends, amounting to approximately 10% of its market cap annually, warrant further consideration
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