Chevron (CVX) Reports Q2 Sales of $37B

Chevron (NYSE: CVX) reported Q2 EPS of $0.30, may not compare to the analyst estimate of $1.16. Revenue for the quarter came in at $37 billion versus the consensus estimate of $30.91 billion.

*** Included in the quarter were impairments of $1.96 billion and other charges of approximately $670 million relating to project suspensions and adverse tax effects, all of which were non-cash charges stemming from a downward revision in the company’s longer-term crude oil price outlook. Partially offsetting were gains on asset sales totaling $1.80 billion in the current quarter. Foreign currency effects decreased earnings in the 2015 quarter by $251 million, compared with a decrease of $232 million a year earlier.

“Second quarter financial results were weak, reflecting a crude price decline of nearly 50 percent from a year ago. Our Upstream businesses were particularly hard hit, as lower prices reduced revenues and triggered impairments and other charges. Downstream operations continued to deliver strong financial performance, reflecting both high reliability and improved margins,” said Chairman and CEO John Watson.

“Multiple efforts to improve future earnings and cash flows are underway,” Watson continued. “We’re getting our cost structure down, through renegotiations across the supply chain and by sizing our contractor and employee workforce to reflect lower activity levels going forward. We’re actively managing to a smaller capital program, as projects currently under construction come online and as potential new projects are paced and re-bid. In addition, our 4-year divestment program is ahead of pace.”

“Project execution on our Gorgon and Wheatstone Australian LNG projects is a priority for us,” Watson commented. “Incremental production and cash generation from these projects and others, along with a curtailed capital program, should provide support for continuing competitive shareholder distributions.”

For earnings history and earnings-related data on Chevron (CVX) click here.

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