Chevron's second-quarter net profit jumped to $12.1 billion as free cash flow more than tripled from a year earlier. The results funded the dividend with room to spare, cut debt by a record amount, and left the payout on firmer footing.
Chevron's second-quarter results have strengthened the case for its dividend. The oil producer posted $12.1 billion in net profit, a 446% jump versus the second quarter and a 385% jump versus the year-earlier period. Adjusted earnings of $6.05 per share beat the Wall Street consensus estimate of $5.55.
Cash flow from operations reached $22.6 billion, $20.1 billion above the prior quarter and more than the combined $15.9 billion Chevron generated in the first half of last year. Free cash flow came in at $15.4 billion, more than triple the $4.9 billion produced a year earlier and the $4.1 billion produced last quarter. Record U.S. oil and gas production and refinery throughput drove the gains, as did Brent crude, which averaged $104 a barrel during the quarter.
That cash flow easily covered Chevron's $3.5 billion in dividend payments for the quarter. The company still repurchased over $3.1 billion of shares while cutting debt by a record $8.4 billion, pulling its net leverage ratio down from 1.3 times to 0.6 times.
Chevron has now raised its dividend for 39 consecutive years, and the stronger balance sheet gives it more room to keep the streak alive.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
