Chevron misses earnings estimate as refining posts first loss in four years

Chevron Corp reported fourth-quarter earnings below Wall Street estimates on Friday as weak margins pushed its refining business into a loss for the first time since 2020, sending its shares down more than 2%.

Chevron CEO Mike Wirth told Reuters the downtrend in refining margins is set to continue this year.

The second-largest U.S. oil producer posted total earnings of $3.24 billion for the three months ended Dec. 31, up from $2.26 billion in the same period last year.

However, its adjusted earnings per share of $2.06 was below Wall Street's $2.11 estimate, hit by weak fuel sales in the United States.

Profit on fuel sales tumbled across the industry last year, as the post-pandemic demand surge faded and economic activity faltered in the United States and China, the two largest oil consumers.

Chevron's downstream business lost $248 million in the fourth quarter of 2024, compared with a profit of $1.15 billion in the same period a year ago.

Margins softened in both U.S. and international markets, but weak jet fuel demand aggravated troubles for the Houston-headquartered company's domestic business. U.S. fuel sales fell 3% year-over-year, Chevron said.

Refining margins were unlikely to stay at the elevated levels seen coming out of the pandemic, CEO Wirth said in an interview.

"This trend we have seen of margins softening through 2024 is something you can expect to continue to see, to extend into 2025," he said.

While refining struggled, Chevron's oil production held relatively flat in the fourth quarter at 3.35 million barrels of oil equivalent per day (boepd), compared with 3.39 million bpd a year ago.

The company expects production growth of 6% through 2026 outside of its asset sales, it said in its conference call presentation, with growth weighted towards the second half of 2025 as its projects in Tengiz in Kazakhstan and the Gulf of Mexico come online.

Production from the Permian Basin of Texas and New Mexico, the top U.S. oilfield, was within touching distance of a 1 million bpd target, Wirth said.

Chevron also said it expects to maintain its share buyback program of $10 billion to $20 billion per year, and projected free cash flow at $5 billion in 2025 and $6 billion in 2026 if Brent holds at $70 a barrel.