Chevron (NYSE:CVX) reported lower-than-expected second-quarter profits earlier this morning. The miss was driven by reduced refining margins and the loss of a number of tax breaks. CVX stock is falling 1.4% in early trading.
In conjunction with the release of Chevron’s Q2 results, the oil giant disclosed that it would move its headquarters from California to Texas.
Chevron’s Q2 Miss
The firm’s earnings per share, excluding certain items, came in at $2.55, well below analysts’ average estimate of $2.93. Moreover, its bottom line sank 26% versus the same period a year earlier. On the top line, however, its revenue climbed to $51.18 billion last quarter versus $48.9 billion in Q2 of 2023. Analysts, on average, had expected the firm to generate $50.8 billion of revenue.
The profits of the company’s U.S. production unit climbed 31% year-over-year to $2.16 billion, but the profit of the corresponding overseas division sank 30% YOY to $2.3 billion. Lower natural gas prices and unfavorable foreign currency fluctuations weighed on the unit’s profitability.
The profit of the firm’s U.S. refining business cratered 74% year-over-year to $280 million.
On the positive side, record oil production in the company’s Permian fields helped boost the company’s U.S. net oil-equivalent production by 350,000 barrels per day.
“Despite recent operational downtime and softer margins, we remain poised to deliver significant long-term earnings and cash flow growth,” CEO Mike Wirth said.
CVX Stock: Moving to Texas
Chevron plans to move its headquarters from San Ramon, California, to Houston, Texas. The company’s CEO, Mike Wirth, and Vice Chairman, Mark Nelson, will be based in Texas by the end of 2024. The other employees who are based in California will make the move gradually over the next five years.
The company already has about 7,000 employees in the Houston area and 2,000 still in San Ramon.
Heading into today, over the last three months, CVX stock had fallen 4.75%, while it was down 2.3% in 2024.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
