On April 28, Chevron Corporation (NYSE:CVX) will disclose the results of its operations for the first quarter. The current consensus estimate for the upcoming quarterly report projects a profit of $3.36 per share on revenues of $47.6 billion for the period.

Let’s investigate the possible causes that led to the performance of the American energy giant during the March quarter. However, it is important to examine Chevron’s performance in the preceding quarter before moving on.

Highlights of Fourth Quarter Earnings and a History of Surprises

Due to a lower-than-expected bottom line in both of the company’s segments, the integrated player situated in San Ramon, California was unable to meet the consensus mark during the most recent quarter that was reported. The Consensus Estimate for Chevron’s earnings per share was $4.16, but the company announced adjusted earnings per share of $4.09 instead. Despite this, revenues of $56.5 billion had come in 8% higher than the consensus mark, which can be attributed to the rise in commodity prices.

The Consensus Estimate for Chevron’s earnings was met in two of the most recent four quarters, while it was not met in the other two quarters. This resulted in an earnings surprise that was 5.7% on average.

The Trend in the Revision of Estimates

Over the course of the past week, the Consensus Estimate for the first-quarter bottom line has seen a 1.2% increase in its upward direction. The expected number did not change from last year to this year. The Consensus Estimate for revenues, on the other hand, indicates a fall of 12.4% from the same time period the previous year.

Things to Take Into Account

It is anticipated that Chevron has profited from the uptick in domestic oil and gas production, which is largely attributable to the robust output achieved in the region known as the Permian Basin. As a matter of fact, the Consensus Estimate for the United States volume is pegged at 1,234 thousand oil-equivalent barrels per day (MBOE/d) for the to-be-reported quarter. This number represents an increase from the volume recorded in the same quarter of the previous year, which was 1,184 MBOE/d.

Additionally, it is anticipated that the CVX downstream (also known as refining) unit has reaped the benefits of a more favorable macro environment. It is anticipated that the company’s segment earnings will increase year over year as a result of the margins continuing to be robust. The strong downstream dynamics of Chevron are reflected in the Consensus Estimate for the company’s profits for the quarter that will be announced, which is predicted to be $1.6 billion. The number indicates a significant increase from the profit of $331 million that was reported in the same quarter the previous year.

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