A Nabors Industries worker uses a power washer to clean the floor of a rig drilling for Chevron in the Permian Basin near Midland, Texas, March 1, 2018.
Daniel Acker | Bloomberg | Getty Images
Chevron warned Friday in its quarterly earnings report that results will remain depressed as long as oil prices remain low, and said that it was further cutting its 2020 capital spending plan.
The company did, however, beat analysts estimates on the top and bottom line. For the first quarter Chevron reported EPS of $1.93 and $31.5 billion in revenue, helped by downstream margins and increased production in the Permian.
Analysts had been expecting the company to earn 68 cents per share for the quarter, and post $29.38 billion in revenue, according to estimates from Refinitiv. However, it’s difficult to compare reported earnings to analyst estimates for Chevron’s first quarter, as the coronavirus pandemic continues to hit global economies and makes earnings impact difficult to assess.
In the same quarter a year earlier the oil giant earned $1.39 per share on $35.20 billion in revenue.
But looking forward the company said lower oil prices will have a significant impact.
“Financial results in future periods are expected to be depressed as long as current market conditions persist,” the company said in a statement.
West Texas Intermediate, the U.S. oil benchmark, has dropped more than 70% this year, forcing some energy companies to cut their dividend.
In March the oil giant said it would cut its capital spending plans for 2020 by 20% — from $20 billion to $16 billion — and suspend its buyback program in an effort to reduce costs, but said that the dividend remained a priority.
Shares of Chevron have shed 23% this year.
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