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Chevron: Earnings Prerelease With a Splash of Management Changes

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Chevron Corp
(CVX)

In an unusual move, Chevron CVX prereleased second-quarter results while announcing management changes. Second-quarter adjusted earnings fell to $5.8 billion from $11.4 billion a year ago as lower oil and natural gas prices offset higher production. Production increased to 2,959 thousand barrels of oil equivalent per day from 2,896 mboe/d a year ago, with an 11% increase in Permian Basin volumes to a record 772 mboe/d. During the quarter, Chevron repurchased $4.4 billion in shares, in line with guidance. It expects to close the PDC Energy acquisition in August. Our fair value estimate and narrow moat rating are unchanged. More detail will be available with the full earnings release on July 28.

Chevron also announced two key management changes. First, it waived the mandatory retirement age of 65 for current CEO Mike Wirth, who is 63, effectively extending his tenure indefinitely. Wirth has deftly steered Chevron during his tenure, so we view the extension positively. Second, Chevron announced that CFO Pierre Breber will retire in March 2024 and be replaced by Eimear Bonner, currently vice president and chief technology officer and president of the Chevron Technical Center. Chevron also announced several other leadership changes related to this transition.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Allen Good

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Allen Good, CFA, is a director for Morningstar Holland BV, a wholly owned subsidiary of Morningstar, Inc. Based in Amsterdam, he covers the oil and gas industries. He is also chair of the Morningstar Research Services Economic Moat Committee, a group of senior members of the equity research team responsible for reviewing all Economic Moat and Moat Trend ratings issued by Morningstar.

Before joining Morningstar in 2008, he performed merger and acquisition advisory work for a middle-market investment bank. Before that, he spent several years at Black & Decker in various operational roles.

Good holds a bachelor’s degree in business from the University of Tennessee and a master’s degree in business administration from Kenan-Flagler Business School at the University of North Carolina. He also holds the Chartered Financial Analyst® designation.

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