By Dhirendra Tripathi
Investing.com – Chevron stock (NYSE:CVX) slumped 4% Friday after it missed estimates for fourth-quarter earnings and then proceeded to give a disappointing outlook for this year's oil and gas production.
The company reported earnings of $5.1 billion in the fourth quarter, or $2.56 a share, short of the $3.10 estimate. On a sequential basis, earnings fell.
Analysts expected better after shortages in Europe and Asia pushed crude and gas prices to multi-year highs. Earlier this week, crude crossed $90 a barrel for the first time since 2014. Integrated energy companies such as Chevron and bigger rival Exxon (NYSE:XOM) with both upstream and downstream operations benefit the most in a booming market. But that wasn’t to be after slumping values for some long-held fields hurt its potential to take full advantage of surging prices. Chevron is the first major oil company to report its quarterly results.
The company blamed the miss in earnings to the shrinking value of legacy assets including a stake in Northwest Shelf -- an Australian gas asset the company has been trying to sell since 2020. Royalties related to higher prices under certain international contracts and tax payments also hurt earnings, according to Chevron.
Chevron is projecting oil and gas production to be flat to 3% less this year due contract expirations in Indonesia and Thailand that it didn’t view as competitive.
Sales and other operating revenue climbed 85% to nearly $46 billion and beat estimates.