Thursday, January 23, 2014
Earnings Drop But Dividend Investors Should Fill Up On Chevron
Overall earnings for Chevron decreased because of higher operating expenses. The company’s interim update for the quarter on October 9 reflected a grim outlook, due to which EPS expectations were gradually revised from $3.09 to $2.7.
Upstream earnings in the US fell $96 million because of higher exploration, operating and depreciation expenses, despite the increase in revenues. Higher production volumes and price realizations for both liquids and gas were the primary drivers for revenue growth.
Upstream earnings outside the US were up $49 million. The increase was minimal because the positive impact of higher production volumes, higher crude oil price realization and lower foreign currency exchange losses was lessened by higher operating expenses. Also, Chevron earned $600 million in 2012 when it sold a portion of its equity interest in the Wheatstone project in Australia, so it was difficult for the company to trump its non-US upstream earnings from last year.
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