Earnings Preview: Chevron

Jul.26.12 | About: Chevron Corporation (CVX)

Chevron (NYSE:CVX) is expected to report Q2 earnings before the open on Friday, July 27, with a conference call scheduled for 11:00 am ET.


Analysts are looking for a profit of $3.24 on revenue of $68.56B. The consensus range is $3.10-$3.39 for EPS on revenue of $57.38B-$95.78B, according to First Call. The company said on July 11 in an interim quarterly update that it expects Q2 earnings to be higher than Q1. Specifically, Chevron said it expects upstream results to be lower sequentially due to lower average crude oil prices, but forecast downstream earnings to be significantly higher on improved refining margins and gains on asset sales.

Analyst Views

Following that update, JPMorgan upgraded Chevron to Neutral from Underweight with a price target of $120, citing an improved risk/reward outlook and portfolio sustainability. During the company's call, investors will be interested to hear Chevron's commentary on its recent deal to acquire interest in Kurdistan concessions from Reliance, as well as the potential fall out as it relates to Iran blacklisting the company from signing future oil deals in the country's center and south. Also, Chevron may provide color on its recently announced natural gas discovery offshore Western Australia. In mid-afternoon trading, Chevron is outperforming the broader market with a nearly 2% advance, as well as beating the intra-day performance of fellow oil major ExxonMobil (NYSE:XOM), which reported results today before the bell.