Chevron Corporation (CVX) Earnings & Analysis

Latest quarter

Chevron reported Q2 FY2026 revenue of $70.1 billion, up 56.3% from $44.8 billion a year earlier and above the consensus revenue estimate of $57.5 billion. The company reported adjusted EPS, as the consensus counts it, of $6.06, above the $5.80 consensus estimate; reported diluted EPS was $6.11, compared with $1.45 a year earlier.

Chevron’s filing said upstream earnings rose on higher realizations and sales volumes, partly offset by higher depreciation, depletion and amortization expense. The filing said downstream earnings increased mainly because margins on refined-product sales were higher. Gross margin was 46.0%, versus 37.2% a year earlier, while operating margin was 23.8%, versus 9.25%. Chevron reported free cash flow of $18.1 billion, compared with $4.9 billion in the prior-year quarter.

The filing said sales and other operating revenues increased mainly because refined-product and crude-oil prices and crude-oil sales volumes were higher, partly offset by lower refined-product volumes.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Michael Wirth said geopolitical uncertainty and market volatility formed the backdrop to the quarter, while Chevron’s production and refinery operations set records. He said the Hess acquisition had delivered synergies earlier than planned and that the acquired assets were generating free cash flow. Wirth said Guyana was expected to support oil-growth plans into the 2030s, while Chevron was applying operating practices from its shale and tight business in the Bakken.

Chief Financial Officer Eimear Bonner said adjusted upstream earnings increased because of higher realizations, liftings and favorable timing effects, partly offset by depreciation, depletion and amortization and tax-related expenses. She said adjusted downstream earnings increased primarily on higher refining margins and favorable timing effects. Bonner said Chevron had reached $3.0 billion of structural cost reductions over the past 12 months, with more than 70.0% of savings coming from efficiency gains.

On operations, Bonner said the Middle East conflict’s production impact remained isolated to the Partitioned Zone. Wirth said TCO affiliate distributions were roughly $3.0 billion in the quarter and affirmed $6 billion of guidance at $70 Brent. He said the CPC pipeline remained the primary route to market for TCO production and described shipping, rail and storage as mitigation options for interruptions.

Analysts asked about Permian production, capital efficiency and debottlenecking. Bonner said the business had operated above 1 million barrels per day for five quarters and that Chevron expected Permian capital to be below $3.5 billion this year. Wirth said the company was focusing the organization on efficiencies and productivity and said technology could create options to extend production plateaus or pursue growth. He did not provide a new Permian production-growth target.

Wirth also said Chevron was negotiating in Venezuela to improve fiscal terms for additional investment and that commercial discussions in Iraq still required further work before final agreements.

Guidance

Bonner said Chevron now expects to finish FY2026 at the lower end of its $18.0 billion–$19.0 billion organic capital-spending guidance range. She said Chevron expects 2026 capital spending per barrel of oil equivalent in the Permian to improve by 25.0% versus 2025. Bonner also reaffirmed Chevron’s through-2030 objectives, including annual production growth of 2.00%–3.00% and adjusted free-cash-flow growth averaging more than 10.0% annually.