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Market Update

Earnings on Tap: Chevron

In a world of fast-shrinking investable resources, Chevron is looking to offshore deep-water and LNG for growth.

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 Chevron (CVX) is scheduled to report first-quarter earnings Friday before the markets open. The consensus estimate calls for earnings per share of $3.08 compared with $3.27 per diluted share reported in the first quarter of the previous year.

The country's second largest oil producer by market capitalization posted a 41% hike in fourth quarter earnings at $7.25 billion, boosted by strength in its refining segment and gains from an asset swap. 

Like its fellow supermajor integrated peers, Chevron is finding it increasingly difficult to expand production and add reserves in a world with a shrinking investable resource base. As such, the company is looking to offshore deep-water and liquified natural gas projects for growth, writes Morningstar analyst Allen Good. Investments in LNG projects around the world will allow the company to better exploit stranded resources, adds Good.

The company's shares have gained more than 9% on a year-to-date basis but still trade below Good's fair value estimate.

Gazala Parveen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.