Chevron revenue plummets more than 30% in the third quarter as Covid slams demand

Energy

Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Chevron reported its second straight quarter of losses on Friday after revenue during the third quarter fell 32% year over year as Covid-19 continues to hammer the industry. Amid declining oil prices Chevron said it implemented aggressive cost-cutting measures.

The oil giant lost $207 million during the quarter. On an adjusted basis Chevron earned 11 cents per share, which was ahead of the 27-cent per share loss that analysts polled by Refinitiv had been expecting. Chevron’s revenue came in at $24.45 billion, which missed the consensus estimate of $25.8 billion.

During the second quarter the oil giant lost $1.59 per share on an adjusted basis, while revenue came in at $13.49 billion. In the same quarter a year ago, the company earned $1.36 per share on $36.12 billion in revenue.

“Third quarter results were down from a year ago, primarily due to lower commodity prices and margins resulting from the impact of COVID-19,” said Michael Wirth, the company’s chairman and CEO, in a statement. “The world’s economy continues to operate below pre-pandemic levels, impacting demand for our products which are closely linked to economic activity.”

As energy companies struggle amid depressed oil prices, Chevron said its capital spending declined 48%, while its operating expenses were down 12%.

“We remain focused on what we can control – safe operations, capital discipline and cost management,” Wirth added. On Wednesday the company declared 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 scaled back its operations in response to low commodity prices, among other things. U.S. upstream operations earned $116 million during the quarter, an 84% year-over-year decline. The average sale price per barrel of crude oil and natural gas liquids was $31 during the third quarter, down from $47 in the same period a year earlier.

Chevron said its cash flow from operations in the first nine months of 2020 reached $8.3 billion, down from $21.7 billion during the same period a year earlier.

Earlier in October Chevron completed its acquisition of Noble Energy. The all-stock deal, which was first announced in July, was valued at $5 billion. Including debt, the value reached $13 billion.

Shares of Chevron were slightly lower during premarket trading on Friday. The stock has lost 43% this year.

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