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Are Chevron's (CVX) Q1 Earnings Poised to Beat Expectations?

Zacks Equity Research
·4 min read

Chevron Corporation CVX is set to release first-quarter results on Apr 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $3.36 per share on revenues of $47.6 billion.

Let’s delve into the factors that might have influenced the American energy biggie’s performance in the March quarter. But it’s worth taking a look at Chevron’s previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, the San Ramon, CA-based integrated player missed the consensus mark due to a lower-than-expected bottom line in both the company’s segments. Chevron had reported adjusted earnings per share of $4.09, below the Zacks Consensus Estimate of $4.16. However, revenues of $56.5 billion had come in 8% above the consensus mark, backed by robust commodity prices.

Chevron beat the Zacks Consensus Estimate in two of the last four quarters and missed in the others, which resulted in an earnings surprise of 5.7%, on average. This is depicted in the graph below:

Chevron Corporation Price and EPS Surprise

Chevron Corporation Price and EPS Surprise
Chevron Corporation Price and EPS Surprise

Chevron Corporation price-eps-surprise | Chevron Corporation Quote

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Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line has been revised 1.2% upward in the past seven days. The estimated figure is unchanged year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 12.4% decrease from the year-ago period.

Factors to Consider

Chevron is expected to have benefited from the strength in domestic oil and gas production, thanks to robust output in the showpiece Permian Basin region. As a matter of fact, for the to-be-reported quarter, the Zacks Consensus Estimate for the U.S. volume is pegged at 1,234 thousand oil-equivalent barrels per day (MBOE/d), indicating a rise from the prior-year quarter’s volume of 1,184 MBOE/d.

CVX is also expected to have reaped the reward of a better macro environment in its downstream (or refining) unit. With margins remaining healthy, the company should see segment earnings surge year over year. Echoing Chevron’s strong downstream dynamics, the Zacks Consensus Estimate for the to-be-reported quarter’s income is projected at $1.6 billion. The number suggests a surge from the profit of $331 million reported in the year-ago quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Chevron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Chevron has an Earnings ESP of +0.43% and a Zacks Rank #3.

Other Stocks to Consider

Chevron is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Marathon Petroleum MPC has an Earnings ESP of +1.19% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MPC’s 2023 earnings has been revised 17.4% upward over the past 60 days. Valued at around $55 billion, Marathon Petroleum has gained 46.6% in a year.

TechnipFMC FTI has an Earnings ESP of +16.26% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 27.

For 2023, TechnipFMC has a projected earnings growth rate of 1,733.3%. Valued at around $5.8 billion, FTI has gained 68.4% in a year.

Canadian Natural Resources CNQ has an Earnings ESP of +3.80% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.

Canadian Natural Resources delivered a four-quarter average earnings surprise of 10.5%.  Valued at around $65.9 billion, CNQ has lost 2.4% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Chevron Corporation (CVX) : Free Stock Analysis Report

TechnipFMC plc (FTI) : Free Stock Analysis Report

Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research