Chevron's gross sales drop greater than 30% within the third quarter as Covid hits demand


Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Chevron reported its second straight quarter on Friday in losses after third-quarter sales fell 32% year over year, hammered by Covid-19.

In the midst of falling oil prices, Chevron announced aggressive cost-cutting measures.

The oil giant lost $ 207 million in the quarter. Adjusted, Chevron earned 11 cents per share, far better than the analyst loss of 27 cents per share surveyed by Refinitiv. Chevron's sales were $ 24.45 billion, missing the consensus estimate of $ 25.8 billion.

In the second quarter, the oil giant lost $ 1.59 per share on an adjusted basis, while revenue was $ 13.49 billion.

For the third quarter of last year, the company had sales of $ 1.36 per share on revenue of $ 36.12 billion.

"Third quarter results were lower than a year ago, mainly due to lower commodity prices and margins due to the impact of COVID-19," said Michael Wirth, chairman and CEO, in a statement. "The global economy continues to move below pre-pandemic levels and is affecting demand for our products, which are closely related to economic activity."

As energy companies struggled with low oil prices, Chevron's investments fell 48% and operating costs fell 12%.

"We continue to focus on what we can control – secure processes, capital discipline and cost management," said Wirth. On Wednesday the company announced a quarterly dividend of $ 1.29 per share.

During the third quarter, net oil equivalent production declined 7% year over year to 2.83 million barrels per day as the company shut down due to low commodity prices and lower demand. U.S. upstream operations earned $ 116 million for the quarter, down 84% year over year. Average selling price per barrel of crude oil and natural gas liquids was $ 31 for the third quarter, compared to $ 47 a year earlier.

According to Chevron, cash flow from operating activities for the first nine months of 2020 was $ 8.3 billion, compared with $ 21.7 billion the previous year.

In early October, Chevron completed the acquisition of Noble Energy. The all-stock deal announced in July was valued at $ 5 billion. Including the debt, it was worth $ 13 billion.

Chevron's shares were slightly lower during Friday's premarket trading session. The stock has lost 43% this year.

Correction: For the third quarter of 2019, earnings per share were $ 1.36 and revenue was $ 36.12 billion.


Steven Gregory