Chevron Closes Slightly Higher following Its 4Q15 Results

Chevron's 4Q15 Earnings Miss Estimates

(Continued from Prior Part)

Chevron’s stock performance

Chevron (CVX) announced its 4Q15 results on January 29, 2016, before the market opened. As Chevron missed its estimates for 4Q15, the stock received a weak opening.

CVX opened at $84 per share lower than its previous close of $85.9. Chevron saw highs of $86.7 and lows of $82.9 during the day. Eventually, CVX closed at $86.5, around 0.6% higher than its previous day’s close, in-line with its peers.

On January 29, 2016, CVX’s peers ExxonMobil (XOM), Royal Dutch Shell (RDS.A), and BP (BP) rose by 1.1%, 1.4%, and 1.5%, respectively. The iShares Core High Dividend ETF (HDV) has ~21% exposure to energy sector stocks, including XOM and CVX.

Chevron’s capex position

In 2015, Chevron incurred capital expenditure (or capex) of $34 billion, of which 92% went toward its upstream segment. Amid cost curtailment measures, Chevron continues to prioritize its LNG (liquefied natural gas) projects in Australia. Chevron is expecting LNG production from its Gorgon project in the next few weeks. Also, for its Wheatstone project, all the Train 1 modules have been delivered to the site, with the first LNG cargo expected in mid-2017.

Chevron achieved its first production from Lianzi, Moho Nord, and Chuandongbei projects recently. CVX expects the first LNG cargo from its Angola LNG project in 2Q16. In the latter part of 2016, Chevron expects projects such as Mafumeira Sul in Angola, Bangka in Indonesia, and Alder in the North Sea to start up.

In CVX’s 4Q15 earnings call, regarding 2016 capex, management commented, “In December, we announced a 2016 capital program of $26.6 billion, which was within the guidance range provided on our third-quarter earnings call. Since then, market conditions have deteriorated and we will be responsive. Flexibility in our capital program allows discretion in our spend with a likely outcome for 2016 being near the bottom of our guidance range. Looking beyond 2016, our flexibility will continue to increase and we expect further reductions in our capital program.”

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Chevron’s Earnings Miss Analysts’ Estimates in 4Q15

• Part 2 - Chevron’s Segments Suffer across the Board

• Part 4 - More than Half of Analysts See Chevron as a “Buy”