Chevron (NYSE:CVX)'s third-quarter profits this year took a hit, declining to $2.25 per share, a significant drop from last year's Q3 results of $4.68 per share. This fall in profits failed to meet Wall Street expectations, leading to a pre-market share price decline on Monday. The dip in profits comes despite an average global oil price of $85.92/barrel this quarter, a rise from the second quarter's $77.73.
The drop in Chevron's Q3 profits contrasts with the same period last year when oil and gas prices surged following Russia's invasion of Ukraine. However, the higher oil prices this quarter did not prevent lower crude prices and high costs from negatively affecting refining and chemical profits. This led to an adjusted profit of $3.05/share, falling short of the expected $3.75/share.
Chevron had previously cautioned that maintenance could impact results. Further contributing to the earnings decline was a six-month delay at its Tengizchevroil operation in Kazakhstan. Consequently, earnings for this year stood at $6.5 billion, a decrease from last year's record of $11.2 billion.
The company's cash flow from operations also experienced a downturn, falling to $9.7 billion from last year's peak of $15.3 billion.
Chevron is not the only oil company to report lower Q3 results this year. Other industry giants like Exxon Mobil (NYSE:XOM) and TotalEnergies (EPA:TTEF) also reported profit reductions of 54% and 35% respectively.
This news comes amid a time of significant acquisitions in the energy sector, with Exxon Mobil announcing plans for a $60 billion purchase of Pioneer Natural Resources (NYSE:PXD) and Chevron planning to acquire Hess Corp (NYSE:HES) for over $50 billion.
Despite these setbacks, high crude prices continue to drive acquisitions in the sector, marking a period of significant consolidation. The industry now closely watches events in the Middle East due to potential oil supply disruptions and the possibility of further price increases.
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