A Chevron gas station sign is shown on October 23, 2023 in Austin, Texas.Brandon Bell | Getty ImagesChevron reported a significant decline in fourth-quarter profits compared to the previous year, largely due to various impairment charges. Despite this, the second-largest U.S. oil company managed to distribute a record amount of cash to its shareholders in 2023. Last year, the company returned $23.6 billion to investors through $11.3 billion in dividends and $14.9 billion in share buybacks. This was achieved even as profits dropped by approximately 40% to $21.3 billion from $35.5 billion in 2022.Chevron’s board approved an 8% increase in the quarterly dividend to $1.63 starting in March. As a result, the company’s stock experienced a 1.8% rise in early trading.Here’s how Chevron’s fourth-quarter results compared to the expectations of Wall Street analysts, based on a survey by LSEG (formerly known as Refinitiv):Earnings per share: $3.45 adjusted versus an expected $3.21Revenue: $47.18 billion versus an expected $51.62 billionChevron’s net income dropped by 65% to $2.3 billion, or $1.22 per share, during the quarter, compared to $6.4 billion, or $3.33 per share, a year ago. In the latest period, Chevron’s U.S. oil and gas assets experienced a loss of $1.35 billion due to $1.8 billion in impairment charges and a $1.9 billion cost associated with obligations to decommission previously sold assets in the Gulf of Mexico. Adjusting for the impairment charges, Chevron reported an adjusted profit of $3.45 per share, surpassing Wall Street’s estimate of $3.21 per share for the quarter.Chevron’s refining operation saw profits decline to $1.15 billion in the quarter, a 35% decrease compared to the same period a year ago, when the downstream segment reported earnings of $1.77 billion. The segment encountered challenges as U.S. refining profits decreased due to lower margins on product sales.Crude oil prices were volatile in 2023, with West Texas Intermediate and Brent suffering a more than 10% decline for the year due to a weakening Chinese economy and record oil production in the U.S.Chevron achieved a record production of 3.1 million oil-equivalent barrels per day in 2023, driven by a 14% increase in the U.S. as the company expanded its capital expenditures.Chevron’s capital expenditures for the quarter increased by nearly 16% to $4.4 billion, compared to $3.8 billion in the same period a year ago, as the company invested in recently acquired PDC Energy assets and a majority stake in the hydrogen fuel project developer ACES Delta. Read the full release here.
