Chevron Corp (NYSE: CVX) topped Wall Street estimates in its fiscal third quarter by a significant margin as oil, and natural gas prices rose sharply in recent months. Shares are up about 1.0% on Friday.
Stock repurchase and free cash flow
Chevron announced plans of buying back $625 million worth of its stock as free cash flow came in at $6.7 billion – the highest it has ever reported. On CNBC’s “Squawk Box”, CFO Pierre Breber said:
We’re a better company than we were a few years ago. Our costs are lower, our production is higher, we’re much more capital efficient, we have a clear strategy to deliver higher returns and lower carbon, the outlook is positive, and demand for our products is strong.
Breber agreed that Chevron’s capital expenditure was down 22% year-to-date but said it’ll improve in Q4 and will be up another 20% next year. He confirmed that the oil giant will continue to invest in its legacy business on top of the new energy unit.
Q3 financial performance
Chevron reported $6.11 billion in net income ($3.19 per share) versus the year-ago figure of $207 million (12 cents per share). Adjusted for one-time items, it earned $2.96 in Q3.
The oil giant generated $44.71 billion in revenue that translates to a year-over-year growth of 82.9%. According to FactSet, experts had forecast $2.20 of adjusted EPS on $41.22 billion in revenue.
Cramer’s remarks on CNBC’s ‘Squawk on the Street’
On CNBC’s “Squawk on the Street”, Jim Cramer lauded Chevron’s performance and said it could climb by up to 50% because “it’s the most investable”.
What I really like about Chevron is that it’s got actual growth. It’s got a dividend aristocrat record, continue to raise a dividend, it’s got a very big buyback, and I think that this is the growth stock that people at home should own. It’s a very inexpensive growth stock.
Other notable figures
Chevron’s net oil-equivalent production in the recent quarter climbed by 7% globally, as per the earnings press release. The average per-barrel sales price for crude oil and natural gas liquids jumped from $31 to $58. Natural gas, on the other hand, was priced at $3.25 per thousand cubic feet in the third quarter versus last year’s 89 cents.
Last month, David Bahnsen said Chevron will continue to perform well amidst rising oil prices.
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