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Chevron and Exxon on Friday reported profits for the second straight quarter as improving demand for petroleum products and a jump in oil and gas prices boosted operations.
Chevron also reinstated its share repurchase program, signaling confidence in its futures earnings.
The oil giant earned $1.71 per share during the second quarter on an adjusted basis, with revenue coming in at $37.6 billion. Analysts were expecting the company to earn $1.59 per share on $35.94 billion in revenue, according to estimates from Refinitiv.
“Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending,” Chevron Chairman and CEO Mike Wirth said in a statement. “We will resume share repurchases in the third quarter at an expected rate of $2- $3 billion per year.”
During the first quarter of 2021, the company earned 90 cents per share on an adjusted basis, with revenue coming in at $32.03 billion.
Exxon also beat top- and bottom-line estimates during the period.
The company earned $1.10 per share compared with Wall Street’s expectation of 99 cents, according to estimates from Refinitiv. Revenue came in at $67.74 billion, also ahead of the expected $66.81 billion.
Last quarter, Exxon turned a profit, snapping a four-quarter streak of losses. The company earned 65 cents per share excluding items on $59.15 billion in revenue.
“Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products,” Chairman and CEO Darren Woods said.
“We’re realizing significant benefits from an improved cost structure, solid operating performance and low-cost-of-supply investments that, together, are generating attractive returns and strong cash flow to fund our capital program, pay the dividend and reduce debt.”
The two companies’ results are a far cry from the same period a year earlier as the pandemic sapped demand for petroleum products. During the second quarter of 2020 Chevron lost $1.59 per share on an adjusted basis on revenue of $13.49 billion. Exxon lost 70 cents per share on an adjusted basis on $32.61 billion in revenue.
Still, the oil giants pointed to caution around capital spending plans.
Chevron said it continues to exercise discipline with its capital spending, which is down 32% this year from last year. Exxon said it has spent $6.9 billion on capital and exploration expenditures this year, which was “consistent with planned lower activity in the first half of 2020.”
The company said it anticipates higher spending around key projects, but noted that overall 2021 spending is expected to be at the lower end of its previously announced targets.
During the depths of the pandemic in 2020, energy companies slashed spending as West Texas Intermediate crude futures briefly tumbled into negative territory for the first time on record.
Chevron’s net oil-equivalent production rose 5% year over year to 3.13 million barrels per day during the second quarter of 2021. The company’s U.S. upstream operations earned $1.4 billion, compared with a loss of $2.1 billion in the same period a year ago. Chevron said its average sales price per barrel of crude oil and natural gas liquids was $54, up from $19 a year earlier.
Shares of Chevron and Exxon advanced about 1% during premarket trading on Friday.
Exxon’s oil-equivalent production dipped 2% year over year to 3.6 million barrels per day due to increased maintenance activity.
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