Chevron beats third-quarter estimates as refining margins lift earnings

In brief

• Chevron's third-quarter profit nearly tripled year on year, driven by refining gains.
• Diesel margins and near-full refinery utilization lifted results above analyst forecasts.
• Rival ExxonMobil also posted a sharp profit rise, while US drivers face high gasoline prices before the midterms.

Earnings beat expectations

Chevron's third-quarter earnings reached $9.9 billion, or $5.06 per share, against $3.5 billion, or $1.82 per share, a year earlier (Chevron beats earnings expectations as refining profits soar on high diesel fuel prices – CNBC). Excluding one-time items, the company earned $5.28 per share, above the $4.89 analysts had projected.

Refineries drive the gain

Chevron said its U.S. refineries operated close to full capacity during the quarter, which let it capture unusually wide diesel margins. Diesel has reached record levels as the conflict with Iran has disrupted supply and pushed crude above $100 a barrel (Exxon and Chevron report massive profits after Trump brags U.S. energy companies are ‘making a freaking fortune’ just before midterms – Fortune). Refining profits, rather than crude output alone, accounted for much of the improvement (ExxonMobil and Chevron post bumper profits and warn on diesel supplies – Financial Times).

Comparison with ExxonMobil

Rival ExxonMobil reported a third-quarter profit of $15.4 billion, roughly double the $7.5 billion it made a year earlier, and came close to its record quarterly result from 2022. Both companies have benefited from the same pricing environment (ExxonMobil and Chevron top estimates for Q3 as Americans feel gas price pain – The Guardian) (ExxonMobil and Chevron report blowout profits as Trump touts benefits of high oil prices – NBCNews.com).

Consumer pressure

The windfall comes as American drivers face high fuel costs. Average gasoline prices stood at $4.20 a gallon, about $1.20 higher than a year earlier, according to AAA. Political attention on the issue is growing ahead of the November 3 midterm elections.

Shares

Chevron shares rose about 2% after the report.