Chevron’s Fourth-Quarter Profits Plummet 40% to $21.3B – Despite Record Cash Return to Shareholders in 2023!

A Chevron gas station sign is shown in Austin, Texas, on October 23, 2023. Despite a significant drop in profits, Chevron managed to return a record amount of cash to its shareholders in 2023. The oil major returned $23.6 billion to investors by paying out $11.3 billion in dividends and buying back $14.9 billion in shares last year. This was achieved as the company’s profit fell about 40% to $21.3 billion from $35.5 billion in 2022.

Chevron’s board approved an 8% increase in the quarterly dividend to $1.63 beginning in March. The company’s stock rose about 1.8% in early trading. In the fourth quarter, Chevron’s earnings per share were $3.45 adjusted vs. $3.21 expected. However, revenue was $47.18 billion vs $51.62 billion expected.

Chevron’s net income fell 65% to $2.3 billion, or $1.22 per share, during the quarter, from $6.4 billion, or $3.33 per share, a year ago. The company’s U.S. oil and gas assets recorded a loss of $1.35 billion due to the impact of $1.8 billion in impairment charges and a hit of $1.9 billion associated with obligations to decommission previously sold assets in the Gulf of Mexico. Despite this, Chevron’s refining operation profits fell to $1.15 billion in the quarter, down 35% compared to the same period a year ago.

The segment sagged as U.S. refining profits fell due to lower margins on product sales. Furthermore, in 2023, crude oil prices were volatile, with West Texas Intermediate and Brent falling more than 10% for the year on a weakening Chinese economy and record oil production in the U.S. Chevron produced a record 3.1 million oil-equivalent barrels per day in 2023, led by 14% growth in the U.S as the company boosted its capital expenditures.

In addition, Chevron’s capital expenditures for the quarter rose nearly 16% to $4.4 billion compared with $3.8 billion in the same period a year ago, as the company invested in recently acquired PDC Energy assets and bought a majority stake in the hydrogen fuel project developer ACES Delta.