Chevron’s Q4 Earnings Miss Forecast as Refining Swings to Loss

Chevron’s Q4 Earnings Miss Forecast as Refining Swings to Loss | OilPrice.com

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ByCharles Kennedy– Jan 31, 2025, 10:30 AM CST

Chevron Corporation (NYSE: CVX) booked lower-than-expected earnings for the fourth quarter as weak refining margins and sales resulted in the first loss in its refining division in four years.

Chevron said on Friday that its adjusted earnings came in at $3.6 billion, or $2.06 per share, for the fourth quarter 2024. This is down from the adjusted earnings of $6.5 billion, or $3.45 per share, for the same period of 2023, and lower than the $2.11 earnings per share expected in the analyst consensus in The Wall Street Journal.

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While Chevron’s upstream earnings rose in Q4 from a year earlier, primarily due to the absence of charges from decommissioning obligations for previously sold assets in the Gulf of America, the downstream business posted a loss of $248 million, compared to earnings of over $1.1 billion for the same period of 2023.

The losses in refining accumulated on the back of lower margins on refined product sales, higher operating expenses, and impairments. In the United States, refined product sales decreased by 3% compared to the year-ago period, primarily due to lower demand for jet fuel, partly offset by higher demand for gasoline, Chevron said.

Refining has been a drag on Big Oil’s earnings in the past two quarters, and many of the biggest international oil firms have flagged weakness in the downstream divisions.

Chevron’s CEO Mike Wirth also warned of continued weakness in refining.

“This trend we have seen of margins softening through 2024 is something you can expect to continue to see, to extend into 2025,” Wirth told Reuters.

For the full year 2024, Chevron reported record production and record returns to shareholders.

The other supermajor, ExxonMobil (NYSE: XOM), also reported Q4 earnings today. Exxon, however, booked consensus-beating earnings for the fourth quarter on the back of record Permian and Guyana production. Exxon’s fourth-quarter and full-year earnings were lower from a year earlier, as expected, due to lower commodity prices and weaker refining margins in 2024 compared to 2023.

By Charles Kennedy for Oilprice.com

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