Chevron announced its fourth-quarter results for 2024, which fell short of analysts' expectations. This article examines the company's key financial metrics and strategic plans for the future.
Financial Results for Q4 2024
Chevron reported fourth-quarter 2024 earnings of $3.2 billion, translating to $1.84 per diluted share. This result marks an improvement from the $2.3 billion or $1.22 per share recorded in the same period in 2023. It is important to note that these figures include significant charges, such as $715 million for severance and $400 million for impairments. Adjusted earnings stood at $3.6 billion or $2.06 per share, reflecting a decrease from $6.5 billion or $3.45 per share in the fourth quarter of the previous year.
Analysis of Company Revenues
Chevron's total revenues and other income for the quarter reached $52.2 billion, up from $47.2 billion in the fourth quarter of 2023. The company's upstream segment reported earnings of $4.3 billion, driven by record oil-equivalent production levels, particularly in the Permian Basin, while the downstream segment faced challenges, posting a loss of $248 million due to lower margins on refined product sales and higher operating expenses. The company's cash flow from operations totaled $8.7 billion, a decline from $12.4 billion recorded in the same quarter last year, attributed to lower earnings and higher payments related to asset retirement obligations.
Growth Strategy and Cost Reduction
Chevron aims for strategic growth and cost management. The company announced a target for reducing structural costs by $2-$3 billion by the end of 2026, aiming to enhance its financial flexibility and operational efficiency. The company's capital investment strategy remains focused on upstream growth, with key projects in the Gulf of America and Kazakhstan. Recent asset sales in Canada, the Republic of Congo, and Alaska are expected to streamline operations and focus resources on high-return projects. Chevron is also progressing with the acquisition of Hess Corporation, which is anticipated to bolster its upstream portfolio.
Chevron's fourth-quarter 2024 results presented mixed outcomes, with some positive aspects in upstream and challenges in downstream. The company continues to work on cost reduction and increasing its financial flexibility to ensure free cash flow growth in the coming years.
