Chevron Can Still Energize Your Portfolio
NEW YORK (TheStreet) -- Since reaching a recent high of $126.43 in September, shares of Chevron
Investors are now wondering if Chevron best days are over. I don't believe that to be the case.
As with rival Exxon Mobil
To that end, the 6% decline in profits, which coincided with higher expenses wasn't a surprise. In fact, on a relative basis, I consider it a strong performance. While the 6% decline might seem disappointing, let's realize not only did Exxon's profits declined 18% this quarter, which didn't stop Warren Buffett from taking a $3.4 billion stake in the company. Rivals such as BP
So, before we blow Chevron's results completely out of proportion, given that the company posted a 3% year-over-year increase in oil and gas production, along with (what remains) a highly profitable upstream business, I believe the company still offers plenty of value at current levels. This is despite the struggles in the refining business.
With Exxon posting third-quarter production of growth of only 1.5%, which (if I may say) was good for Exxon, I was quite pleased with Chevron's output of 3%. The Street saw it differently. Investors have every right to demand more, especially since management missed its own production guidance. But it's not that cut-and-dry.
Let's not forget, in the August quarter, not only did Chevron's revenue decline 8% year over year, but production declined 2% year over year and sequentially. By contrast, in this quarter revenue grew almost 2% compared to a 2.4% revenue decline for Exxon. Chevron's net oil-equivalent production rose 2.7% from 2.52 million barrels per day to 2.59 million.