Chevron Continues to Capitalize on High Commodity Prices in Q1; Bumping Repurchases to top of Range

Chevron reported first quarter earnings that fell just short of market expectations but still increased significantly from the year before thanks to higher commodity prices. Adjusted earnings increased to $6.3 billion from $1.4 million the year before. Upstream earnings were responsible for the improvement demonstrating Chevron’s leverage to oil and gas prices, increasing to $6.9 billion from $2.4 billion the year before even as production slipped to 3,060 mboed from 3,121 mboed the year before, largely on contract expirations. However, Permian production grew to a record 692 mboed during the quarter and the company increased its 2022 guidance to 700-750 mboed, implying growth of 15% from 2021. Downstream earnings improved to $331 million from $5 million a year ago but remain relatively weak due to losses in the international segment from higher expenses and lower margins. Timing effects related to a rising price market were also responsible for the weaker performance, but should be made up in subsequent quarters.