Chevron’s [NYSE: CVX] profits reach new heights announces $75 billion stock buyback

Chevron’s [NYSE: CVX] profits reach new heights announce a $75 billion stock buyback.

A record full-year profit of $36.5 billion was declared by Chevron, helped by rising oil prices. The company’s adjusted earnings increased by 36% from its previous record profit established in 2011 and more than doubled from the $15.6 billion it made in 2021. Earnings for the oil company’s fourth quarter came in at $7.9 billion, up 61% from a year earlier but less than the record quarterly profits of $11.4 billion it posted for the second quarter.

The $4.09 earnings per share for the fourth quarter fell short of the $4.38 per share estimate made by Refinitiv’s panel of analysts. However, the $56.5 billion in sales for the quarter exceeded expectations by about $2 billion and increased 17% from the same period last year. $246.3 billion in total revenue marked a 52% increase from 2021.

In premarket trade, Chevron (CVX) shares fell by a little bit more than 1%. Prior to the Friday report Chevron, the country’s second-largest oil firm behind ExxonMobil, had announced a significant $75 billion share repurchase program combined with a 6% dividend increase. Those who believed oil corporations should spend their money on producing more oil and gasoline to boost supply and drive up prices criticized the choice of lower costs for drivers wary of inflation. After the share repurchase was announced on Wednesday evening, Abdullah Hasan, assistant press secretary at the White House, tweeted, “Giving out $75 billion to executives and wealthy shareholders sure is an odd way to show it for a company that claimed not too long ago that it was ‘working hard’ to increase oil production.

The annual US production grew to the equivalent of 1.2 million barrels of oil per day, according to Chevron’s announcement on Friday. Investments in operations have increased by more than 75% since 2021.

It spent $12.3 billion on capital expenditures and exploration in 2022, up 43% from $8.6 billion in 2021, but only marginally more than the $11 billion it spent on dividends, for example, the $11.3 billion spent on share repurchases throughout the year.

The record profit was mostly caused by the year’s rising oil prices, not by more oil being produced.

In the wake of Russia’s invasion of Ukraine in 2022, oil prices rose sharply, favoring Chevron and other significant oil firms. Although Russia, one of the top oil exporters in the world, provided very little oil to the United States, sanctions imposed on Russia after the invasion upset the market for commodities, which in turn affected the price of oil.

The average price of a gallon of ordinary petrol in the United States shattered the record in early June, while futures for a barrel of Brent crude oil, the global benchmark, touched a record high of $123.58 close a week later, it passed the $5 mark to hit a record $5.03.

But since then, the cost of oil and gas has significantly decreased. While the average price of a gallon of normal gas is currently $3.51, it is only marginally higher than the average of $3.35 from a year ago. Brent closed Thursday at $87.47, just below the level of the prior year.

However, prices have started to increase once more, in part because China’s Covid lockdown regulations have been relaxed. Traders view that as a positive indicator for the worldwide demand for gasoline and oil. Winter weather-related refinery issues are also driving up prices.

The cost of a gallon of ordinary gasoline in the US has increased on average by over 12 cents just in the past week and by 41 cents, or 13%, in the past month. Brent oil is up 12% in the last three weeks.

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