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  • Chevron 2012 1Q Financial Analysis 0 comments
    May 29, 2012 2:47 PM | about stocks: CVX

    Chevron 2011 1Q results are positive. Revenue has increased both compared to Q4 2011 and Q1 2011 to 58,9 bn.$ or by +1% then previous year and +2% then previous quarter. Net Income before depreciation has increased to 9,7 bn.$ which is +4% more then year earlier and more then +15% more then previous quarter. Profitability has increased because profit has increased more then revenue.

    (click to enlarge)

    Growth was driven by downstream income increase while upstream has decreased. Downstream takes up to 88% of companies revenue. As this segment is less influenced by oil price as they only take their margin in refining and selling fuel at petrol stations this is good for long term results. But earnings mainly comes from upstream activity which is 6,1 bn.$ compared to 0,8 bn.$ downstream earnings, so the margin of downstream activity is very low, but their margin is negatively impacted by rising oil price, so if the price will drop thus decreasing upstream earnings it will increase downstream earnings. This counterbalance is a good thing. US sales has ~41% which is quite a lot, but knowing that US economy is recovering its is a good dependence. In general companies results are positive.

    (click to enlarge)

    Balance structure remains quite good. Equity level is floating around 60% and has increased a bit since last quarter from 58% to 59%, which is good level. Liquidity ratio is also good and is around 1,6. Inventory turnover is ~10 days, account receivables ~30 days which is in line. ROE is around 20% which is quite good.

    (click to enlarge)

    Investments into long term property is 4 bn.$/Q and show some decrease in pas few quarters, but this king of level ~1/2 or earnings is quite normal. Money alocated to own share repurchase is ~1 bn.$ while dividend payments takes 1,6 bn.$ which is quite reasonable amount or 27% of companies earnings. In general companies balance structure is acceptable.

    Share value:

    Equity / share 125,5 bn.$ 1,973 bn. 63,6 $/sh.
    Market value 103,4 $ +39,8$ 4,2 years
    Year Net income before Depreciation 40,2 bn.$ +20,4$/sh. 19,7%

    Companies share basic value is ~63,6$ (61,3$ compared to 4Q). Current market price is ~103,4$ (110$), which shows that market is paying ~39,8$ more or just 2 years (2,4 years) of Net income before Depreciation earnings 40,2 bn.$/year or 20,4$/share. Companies shares market evaluation is very good and is even close to a level where is could be considered as under evaluated (>1 year of earnings). Share profitability (Share market price/Net income before Depreciation) if not calculating goodwill write-off is 19,7% (18%) which is also a very good ratio.

    Company pays 0,9$/share/quarter dividend or ~3,5% (2,9%) dividend yield which is good, with dividend payout ratio ~18% which is a very good level with a lot of reserve. Company has increased its dividend payments up from 0,81$ to 0,90$ or by +11,1% compared to last year. Companies cash flow management can be considered as well balanced.

    Analysis source: Chevron 2012 1Q financial results

    Previous analysis: Chevron 2011 4Q financial analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: CVX
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