Chevron Corp. banked $35.5 billion in annual profit in 2022, bookending the oil and gas giant’s best year on record.
Chevron on Friday released its fourth-quarter earnings report showing that the California-based company generated $6.35 billion in net income during the last three months of 2022, up from $5.1 billion in Q4 2021.
On an annual basis, Chevron reported earnings of $35.5 billion, more than doubling the prior year’s results of $15.6 billion. This outpaced Chevron’s 2011 record of $26.9 billion, logged in the company’s 2011 annual report.
Chevron — the second-largest U.S. oil and natural gas company after ExxonMobil -– delivered historic profits last year, increasing shareholder value by $10.74 per diluted share, according to Q4 financial results
Despite setting a new annual record in 2022, quarterly results came in below analyst expectations. Analysts surveyed by Zacks Investment Research expected Chevron to report $4.16 per diluted share, $0.07 below actual results.
“Again in 2022, we delivered on our financial priorities: returning cash to shareholders, investing capital efficiently, and paying down debt,” said Mike Wirth, Chevron’s chairman and CEO.
“There aren’t many sectors generating the type of free cash flow that energy is right now,” said Jeff Wyll, an analyst at investment firm Neuberger Berman, to the Wall Street Journal. “The sector really can’t be ignored. Given the supply-demand balance, you have to have some things go wrong here to see a pullback in oil prices.”
Chevron’s historic profits in 2022 were amplified by global developments, such as the war in Ukraine, which sent oil and natural gas prices to multi-year highs.
“We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record,” Wirth said in the report. “The company’s investments increased by more than 75 percent from 2021, and annual U.S. production increased to 1.2 million barrels of oil equivalent per day, led by 16 percent growth in Permian Basin unconventional production.”
Chevron’s other 2022 financial highlights, according to the Q4 earnings press release, included:
- Increased quarterly dividend per share by 6% from the prior year, paying out $11.0 billion to shareholders.
- Achieved return on capital employed of more than 20%, the highest since 2011.
- Strengthened its industry-leading balance sheet further with a debt ratio of 12.8% and a net debt ratio of 3.3%.
- Returned an additional $11.25 billion to shareholders, repurchasing nearly 70 million shares, ending the year at an annual repurchase rate of $15 billion.