First Quarter Energy Sector Earnings: Chevron, ExxonMobil, Kinder Morgan, Valero and ConocoPhillips

First quarter earnings are rolling in, and the energy sector is broadly exceeding expectations.


Given the poor performance of the downstream businesses of Chevron and ExxonMobil, one would expect a poor quarter from refiner Valero. Indeed, total revenues fell 8.2% to $24.3 billion, compared to $26.4 billion in the prior-year quarter. Earnings fell to $0.34 per share, which was down from $1.00 a share a year ago, but significantly better than the consensus estimate of $0.20 a share.

The earnings beat was attributed to higher average ethanol production volumes and the expansion of the company’s Diamond Green Diesel plant.

Refining margin per barrel of decreased to $7.97 from the year-ago level of $8.65. Refining operating expense per barrel increased to $4.15, versus $3.83 in the year-ago quarter.

Refinery capacity utilization for the quarter was 91%, with throughput volumes declining 66,000 barrels per day from the prior year to 2.9 million barrels per day.

Investors were pleased with the results, as the share price jumped 3.5% following the earnings release. Valero also announced a quarterly dividend of $0.90 per share, which translates to a forward annualized yield of 3.97%.


ConocoPhillips is the world’s largest independent pure oil and gas producer, and the company’s earnings are a bellwether for the upstream segment.

During the first quarter, ConocoPhillips reported earnings per share of $1.00, beating the consensus estimate of $0.92 per share. This marked the fourth straight quarter ConocoPhillips has surpassed consensus estimates. Total earnings for the quarter were $1.1 billion.

Total production excluding Libya for the first quarter of 2019 was 1.318 million barrels of oil equivalent per day, an increase of 7.7% compared with the same period a year ago. Production in the Lower 48 Big 3 unconventional plays (Permian, Eagle Ford, and Bakken) grew by 30% year-over-year.

ConocoPhillips generated $2.9 billion in cash from operations (CFO), which was more than enough to cover capital expenditures and investments ($1.6 billion), share repurchases ($0.8 billion) and dividends ($0.3 billion). During the quarter, 37% of CFO generated was returned to shareholders. At the end of the quarter, the company had on hand $6.7 billion of cash and short-term investments.

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