Chevron tops third-quarter forecasts as Hess deal drives record oil output despite profit slide

Chevron Corp. reported third-quarter results that surpassed Wall Street projections, buoyed by an unprecedented jump in oil production following its acquisition of Hess Corp., even as net income fell because of weaker crude prices and transaction expenses.

The California-based energy company disclosed net earnings of $3.54 billion, or $1.82 per diluted share, for the three months ended Sept. 30. The figure represents a 21 percent decrease from the $4.49 billion, or $2.48 per share, posted in the same period a year earlier. Chevron attributed the drop primarily to a $235 million charge tied to closing costs associated with the Hess purchase and the overall decline in benchmark oil prices.

Excluding acquisition-related charges and foreign-currency effects, adjusted earnings came in at $1.85 per share, topping the $1.68 average estimate compiled by LSEG. Revenue reached $49.73 billion, also ahead of the $49.01 billion consensus forecast.

U.S. crude prices have retreated roughly 16 percent so far this year. Market observers cite increased supply from the OPEC+ alliance and worries that import tariffs imposed by President Donald Trump could slow economic growth. Current price trends are tracked closely by the U.S. Energy Information Administration, which highlights the volatility confronting producers.

Record production offsets price weakness

Despite softer pricing, Chevron pumped a record 4.1 million barrels of oil equivalent per day (boe/d), an increase of 21 percent from the third quarter of 2024. Management credited the integration of Hess assets—particularly in Guyana—along with growth in the Permian Basin, deep-water Gulf of Mexico projects and the Tengiz expansion in Kazakhstan.

The company’s U.S. upstream segment generated $1.28 billion in profit, down 34 percent from $1.95 billion a year earlier. Domestic output nevertheless climbed 27 percent to 2 million boe/d, up from 1.6 million boe/d in the prior-year period.

International upstream operations earned $2 billion, a 24 percent decline compared with $2.64 billion last year. Production outside the United States rose 16 percent to 2 million boe/d, compared with 1.76 million boe/d in the 2024 quarter.

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Refining margins boost downstream performance

Results were stronger in the downstream business. Chevron’s U.S. refining and marketing segment posted a profit of $638 million, more than quadruple the $146 million recorded a year earlier. The company cited wider margins on gasoline and distillate sales as the principal driver. Overseas refining operations earned $499 million, up 11 percent from $449 million in the comparable quarter of 2024.

Across the entire enterprise, capital and exploratory expenditures totaled $4.4 billion, a 7 percent year-over-year increase that Chevron attributed largely to spending on legacy Hess projects. Even with the higher outlays, adjusted free cash flow expanded by roughly 50 percent to $7 billion, benefiting from the surge in production volumes.

Outlook shaped by integration and market conditions

Management indicated that focus now shifts to fully integrating Hess assets while navigating a commodity environment marked by uncertain demand and evolving supply dynamics. The company did not provide updated full-year guidance in the earnings statement, but executives reiterated plans to maintain spending discipline and prioritize shareholder returns.

Chevron’s third-quarter showing reinforces the impact of consolidation in the oil and gas sector, illustrating how acquisitions can deliver volume growth that cushions the effect of lower prices. Still, the quarter underscored the sensitivity of profits to market swings in crude and refined products, setting the stage for heightened attention to cost management and operational efficiencies through the remainder of the year.

Crédito da imagem: Bloomberg