The American oil and gas giant, Chevron, has reported a 26% decline in net income for the second quarter, primarily due to a reduction in refining margins, as outlined in a press release on Friday.
From April to June, the company’s net profit amounted to $4.4 billion, down from $6 billion a year earlier, a decrease attributed to shrinking refining margins that have similarly impacted other major oil companies.
Earnings Per Share and Revenue
On a per-share basis, excluding exceptional items—a metric closely watched by the markets—earnings fell by 17.2% year-over-year to $2.55, falling short of analysts’ average expectations.
However, Chevron’s revenue rose by 4.7% to $51.18 billion, exceeding market forecasts.
CEO’s Statement
“Despite recent operational stoppages and reduced margins, we are poised to deliver significant long-term earnings and cash flow growth,” stated Chevron CEO Mike Wirth in the press release.
Production Increase
The company’s production increased by 11% during the period, thanks in part to the integration of PDC Energy, an American company acquired last year.
Chevron also highlighted the productivity of its sites in the Permian Basin (a hydrocarbon-rich sedimentary basin in West Texas and Southeast New Mexico) and the Denver-Julesburg Basin (spanning Colorado to Kansas).
Exploration and Production Profits
Chevron’s exploration and production activities in the United States generated a profit of $2.2 billion in the second quarter, marking a 32% increase year-over-year, driven by higher sales volumes.
Conversely, profits from these activities in the rest of the world declined by 30% to $2.3 billion, impacted by fewer natural gas projects and unfavorable exchange rate effects.
Refining and Distribution
The refining and distribution segment saw a significant decline. In the United States, this segment generated a profit of $280 million, down 74%, “mainly due to reduced margins on refined product sales and increased operating expenses,” the press release noted.
Internationally, the profit from refining and distribution also dropped by 26% to $317 million, similarly squeezed by falling margins.
Headquarters Relocation
Chevron also announced on Friday that it will relocate its official headquarters from San Ramon, California, to Houston, Texas, over the next five years.
Acquisition of Hess
Additionally, Chevron’s acquisition of oil company Hess will face a delay before being finalized. An arbitration decision on this $53 billion deal is now expected in May 2025, according to a document filed with the U.S. Securities and Exchange Commission (SEC) on Wednesday.
The final decision is anticipated within the following three months, the company specified.
At the opening of the New York Stock Exchange, Chevron’s stock fell by 0.77%.