Chevron slashes costs to protect dividend from coronavirus
Chevron is deepening capital spending cuts
Chevron CEO Mike Wirth discusses the oil company's financial management during the coronavirus pandemic, including reductions in capital spending.
Chevron Corp. is taking further action to protect its prized divided.
The San Ramon, California-based integrated energy company will reduce capital expenditures by an additional $2 billion to $14 billion and lower operating costs by $1 billion. Chevron in March cut capital spending by $4 billion and suspended share buybacks.
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“First-quarter earnings were up from a year ago, driven by downstream margins and increased" output from the Permian basin, CEO Michael Wirth said in a statement. “However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.”
Chevron reported a first-quarter profit of $3.6 billion, or $1.93 a share, as revenue fell 11 percent to $31.5 billion. Wall Street analysts surveyed by Refintiv were expecting 68 cents a share on revenue of $29.4 billion.
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The results included a $240 million gain associated with the sale of upstream assets in the Philippines and a $440 million tax benefit from Chevron's international upstream business.
Chevron's worldwide net oil-equivalent production hit a quarterly record 3.24 million barrels per day, up 6 percent from a year ago.
Shares have slumped 24 percent this year through Thursday, trailing the S&P 500's 9.85 percent drop.
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CORRECTION: An earlier version of this story misstated Chevron's capital spending plans. Spending will be reduced as much as $2 billion, and total outlay may be as low as $14 billion.