Chevron’s August 1 earnings report was positive with net income of $5.7 billion and earnings per share of $2.98. Earnings progressed from the second quarter of 2013 when net income was $5.4 billion and earnings were $2.77 per share. At $2.98, earnings per share soundly beat analysts’ consensus estimate of $2.66. Rising oil prices helped the company to achieve total revenue of $55.6 billion for the second quarter, up from $55.3 billion in the second quarter of 2013. Upstream and downstream earnings reports were as predicted with little disruption from violence in Iraq.
- Warning! GuruFocus has detected 4 Warning Signs with CVX. Click here to check it out.
- CVX 15-Year Financial Data
- The intrinsic value of CVX
- Peter Lynch Chart of CVX
On Thursday, July 31, Exxon also reported positive second quarter earnings results with earnings per share of $2.05 beating analysts’ consensus estimate of $1.86. Net income for the second quarter was $8.8 billion, up from $6.9 billion in the second quarter of 2013. At $2.05, earnings per share for the second quarter were up $0.50 from the second quarter of 2013. In its second quarter earnings report Exxon stated total revenue for the quarter of $111.65 billion also aided by higher oil prices in the industry. The company did not report any major disruptions from violence in the Middle East.
While both companies appear to have diverted delays in Middle East production and refinery processing, unrest in Iraq and the surrounding countries still continues to cause some slowdown in world oil production for the Energy market overall. According to CNN, Iraq holds the world’s fourth-largest reserve of oil. Further unrest and oil production slowdowns are likely to have similar effects on oil prices until violence ceases.
While oil production shows signs of struggling abroad, it does not appear to be significantly impacting the U.S. energy sector exemplified by strong earnings reports for the second quarter from Chevron and Exxon. Year-to-date Chevron is up 0.65%. Exxon Mobil is down 2.18% year-to-date just below the Dow Jones Industrial Average which is at -0.81%. The S&P 500 Energy sector overall has gained 8.02% year-to-date thru August 6.