Chevron (NYSE: CVX) is resuming share repurchases after reporting earnings above expectations for the second quarter on the back of rallying commodity prices.
Chevron reported on Friday adjusted earnings of $3.3 billion, or $1.71 per diluted share for the second quarter 2021. This compares with $1.59 earnings per share (EPS) consensus estimate of analysts compiled by The Wall Street Journal.
Chevron’s second-quarter 2021 earnings compare with a loss of $2.9 billion it posted for the second quarter of 2020, when the market and demand slump impacted revenues and earnings at all major oil companies in the world.
This past quarter, however, oil majors are enjoying high profits thanks to the rallying oil prices and recovering demand for fuel in the United States and globally.
Chevron’s sales and other operating revenues jumped to $36 billion for the second quarter of 2021 from just $16 billion in the year-ago period.
U.S. upstream operations earned $1.4 billion for Chevron in second quarter 2021, compared with a loss of $2.1 billion a year earlier. The improvement was primarily due to higher crude oil realizations and the absence of impairments, writeoffs, and severance accruals. Higher crude oil production also contributed to Chevron’s U.S. upstream earnings. The U.S. downstream also turned to profit in Q2 2021, with earnings of $776 million, compared with a loss of $988 million a year earlier.
“Second quarter earnings were strong, reflecting improved market conditions, combined with transformation benefits and merger synergies,” Chevron’s chairman and CEO Mike Wirth said in a statement.
“Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending,” Wirth added. “We will resume share repurchases in the third quarter at an expected rate of $2-3 billion per year.”
Following the results release, Chevron’s stock was up 2 percent in pre-market trade in New York on Friday.