Chevron's stock pulls back as profit drops amid plunge in natural-gas prices

By Tomi Kilgore

Revenue also declined but beat expectations, boosted by a big jump in U.S. production

Shares of Chevron Corp. pulled back Friday, putting them on track for their first loss in eight sessions, after the oil giant reported first-quarter profit and revenue that fell amid a sharp drop in natural-gas prices, but still managed to beat expectations.

The oil giant (CVX) reported a jump in production, including above-expectation production from its West Texas Permian fields, which helped support the stock.

Chevron also revised up production expectations for the Permian in the first half of the year.

Chevron's worldwide production rose 12%, as a 35% jump in U.S. production, mostly due to the acquisition of PDC Energy and strength in the Permian and Denver-Julesburg basins in the U.S., offset a 2.2% drop in international production.

Chevron's net income fell to $5.5 billion, or $2.97 a share, from $6.57 billion, or $3.46 a share, due primarily to lower margins on refined-product sales and lower natural-gas realizations.

Excluding nonrecurring items, adjusted earnings per share of $2.93 were above the FactSet consensus of $2.92.

The stock was down 0.7% Friday after rallying 5.8% amid a seven-day winning streak and closing Thursday at a six-month high.

U.S. natural-gas realization sank 51.9% in the first quarter, while international realization dropped 19.4%.

Revenue declined 4.1% to $48.72 billion to beat the FactSet consensus of $48.42 billion.

Chevron's operations are strong, Piper Sandler analyst Ryan Todd said in a note Friday, and the company continues to reward shareholders.

Chevron returned $6 billion to shareholders in the quarter, including $3 billion through dividends and share repurchases of nearly $3 billion.

"Chevron reported a solid first-quarter result, driven primarily by strong operational performance," Peter McNally at Third Bridge said.

The stock has rallied 10.8% year to date through Thursday, while the Energy Select Sector SPDR exchange-traded fund (XLE) has run up 15.3% and the S&P 500 has gained 5.8%.

Claudia Assis contributed.

-Tomi Kilgore

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04-26-24 1223ET

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