Chevron (NYSE:CVX) reported second quarter earnings on Friday morning with its profit falling short of analyst expectations, as lower refining margins weighed on results despite record production in key regions.
The oil giant's stock slipped 2.4% following the release.
The company posted adjusted earnings of $4.7 billion, or $2.55 per share, missing the consensus estimate of $2.94 per share. Revenue came in at $51.18 billion, surpassing analysts' projections of $48.68 billion.
Chevron's worldwide net oil-equivalent production rose 11% YoY to 3.29 million barrels per day, driven by the integration of PDC Energy and strong performance in the Permian and Denver-Julesburg Basins. However, this was partially offset by downtime in Australia.
"This quarter, we delivered strong production, enhanced our global exploration portfolio and extended our track record of consistent shareholder returns with over $50 billion of distributions in the last two years," said Mike Wirth, Chevron's chairman and CEO.
Despite the production gains, earnings declined compared to the same period last year, primarily due to lower margins on refined product sales, the absence of favorable tax items from the prior year, and FX headwinds.
U.S. downstream earnings fell to $280 million from $1.08 billion a year ago, impacted by lower refining margins and higher operating expenses. International downstream earnings also decreased, dropping to $317 million from $426 million in Q2 2023.
Looking ahead, Wirth stated, "Despite recent operational downtime and softer margins, we remain poised to deliver significant long-term earnings and cash flow growth."
Elsewhere, Chevron also announced its headquarters will move from San Ramon, California, to Houston, Texas as well as some leadership changes.
Nigel Hearne, executive vice president of Oil, Products & Gas, will retire from Chevron after 35 years at the company, with Mark Nelson, Chevron’s vice chairman, taking responsibility for Oil, Products & Gas, effective October 1, 2024.
Meanwhile, Rhonda Morris, vice president and chief human resources officer, will retire after 31 years at the company, with Michelle Green, vice president of Human Resources, Oil, Products & Gas, set to succeed Morris. Finally, Colin Parfitt, vice president of Midstream, will also retire after 29 years of service to the company, with Andy Walz taking the role of president of Downstream, Midstream & Chemicals, effective October 1, 2024.