Chevron Corp. (CVX, Financial) reported its second-quarter earnings before the market opened on July 28, beating revenue expectations but missing on earnings.
The oil and gas company posted earnings of 77 cents per share, falling short of the expected 87 cents but improving from the loss it reported in second-quarter 2016. Revenue of $34.38 billion, on the other hand, beat expectations of $32.09 billion and increased from $29.2 billion in the year-ago quarter.
The graph below illustrates the trend in Chevron’s revenue since Dec. 28, 2007.
Chevron shares rose more than 1% following the announcement.
The company attributed its performance to cost cuts and improving oil and gas prices and margins. Chairman and CEO John Watson said operating expenses declined 10% and capital spending decreased 25% in the first six months of the year.
“Second-quarter results improved substantially from a year ago and year-to-date net cash flow is positive,” Watson said. “We’re delivering higher production with lower capital and operating expenditures.”
Watson said oil and gas production for the quarter was up 10% from the year before. While the company reported a loss in its U.S. oil and gas exploration and production business, earnings grew in its international business. The company said operations in both its foreign and domestic businesses benefited from higher oil prices.
Chevron’s U.S. downstream business benefited from higher margins on refined product sales and lower operating expenses. In its international downstream business, the company said its earnings loss was partially offset by higher margins but negatively affected by reduced production and the absence of gains incurred from asset sales last year.
The company generated $8.9 billion in operating cash flow, a substantial increase from the $3.7 billion reported last year. In addition, it cut back its spending from $12 billion in the year-ago period to $8.9 billion in the first half of the year.
Disclosure: I do not own any stocks mentioned.
