Overview
Since the Report + 20.8%
Revenue grew 56.0% year over year, EPS beat the estimate by 8.0%; the stock rose 2.4% in its first reaction.
- RevenueQ2
- $70.06B
- ▲ 56% Year Over Year
- EPSAdjusted
- $6.06
- $1.77 a Year Ago
Verdict
BUYWar-driven crude prices lifted Chevron's adjusted profit almost fourfold. The stock rose 2.4% on results day. It handed every bit of that back once Iran tensions eased and oil retreated.
Close on Report DayJul 31
$189.09▲ 2.4%Report-Day Move
- Market Cap(Today)
- ≈ $451 B
- 1Y Return(At Report)
- + 24%
- P/E(At Today's Price · $10.84 · Trailing 12M)
- 21.1
- Net Margin(Trailing 12M)
- 9.9%
Earnings Summary
In 30 Seconds- Adjusted EPS of $6.06 beat the Market Expectation by about 8%, while revenue rose 56% year over year to $70.06B.
- Production rose 20% to 4.07 million barrels of oil equivalent per day, with U.S. output at a company record.
- The stock gained 2.35% on results day but gave back the whole gain within a week as Brent fell after August 3.
The Numbers
Free Cash Flow
$18.1B
3.7x Last Year
Production
4.07M boe/d
▲ 20% · U.S. Record
Average Brent
$104/bbl
$68 a Year Ago
Net Debt Ratio
13.1%
15.6% at End-2025
Quarterly Revenue ($ Billion)
44.82
Q2 25 · $44.8 B
49.73
Q3 25 · $49.7 B · QoQ + 10.9%
46.87
Q4 25 · $46.9 B · QoQ − 5.7%
48.61
Q1 26 · $48.6 B · QoQ + 3.7%
70.06
Q2 26 · $70.1 B · QoQ + 44.1% · YoY + 56.3%
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
Q3 2026 Company Guidance
- Full-Year Capital Expenditure18 – 19 billion18 billion19 billion18 – 19 billion
25% Less Capital Per BarrelLow End of Range ▲
- Annual Production Growth (through 2030)2% – 3%2%3%
Long-term Target Set in November 2025Target Reaffirmed ✓
- Adjusted Free Cash Flow Growth10%
Annual Average Through 2030Above 10% ▲
- Structural Cost Reduction Program3 – 4 billion3 billion4 billion
First $3B Tranche CompletedSix Months Early ▲
- Hess Annual Synergy Target1.5 billion
$1.5B Delivered50% Above Initial Target ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±23% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Downstream$49.6 BShare 73.9%▲ 49.2% YoY
U.S. $24.72B, international $24.92B
- Upstream$17.5 BShare 26.1%▲ 58.4% YoY
U.S. $5.66B, international $11.87B
Key Metrics
Operating Cash Flow
$22.6 B
▲ 162.8% YoYPress Release
Capital Expenditures
$4.54 B
▲ 22.3% YoY10-Q
Return on Capital Employed
21.4%
Press Release
U.S. Refinery Crude Throughput
1.07 M bbl/day
Press Release
Debt Reduction in Quarter
$8.40 B
Press Release
Shares are computed over the segment total: $67.2 B. The segment total differs from consolidated revenue ($70.1 B); the company's eliminations and other lines are not in this table. Source: 10-Q.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Our strong second quarter performance is a result of disciplined investment and strong execution that drove record U.S. upstream production, record crude throughput in our U.S. refineries, and exceptional reliability across key assets.”
- Capital Discipline and Cash Generation
- Early Synergies From Hess Integration
- Iraq and Exploration Growth Options
Summary and Review
Summary
Chevron posted $70.06B in revenue and $6.06 in adjusted earnings per share. Revenue rose 56% year over year. Adjusted EPS climbed from $1.77 to $6.06, a 3.4x increase. That cleared the Market Expectation of $5.62 by roughly 8%. Net income reached $12.1B against $2.5B a year ago. Brent averaged $104 a barrel, against $68 a year earlier. Production hit 4.07 million barrels of oil equivalent per day, up 20%. U.S. output set a company record at 2.08 million barrels.
The stock closed results day at $196.83, up 2.35%. That is a restrained reaction to a near-quadrupling of profit. The market knew this earnings level was not durable. The quarter's engine was Middle East conflict. On August 3 the U.S. stepped back from a strike on Iran and signaled talks. Brent dropped 5% in one session to $83.50. Chevron fell three sessions and closed at $189.09 on August 6. The entire results-day gain was handed back within a week.
On the quarter itself, our read is positive. Set the price tailwind aside and everything within Chevron's control moved the right way. Hess synergies came in 50% above target and six months early. The net debt ratio fell from 15.6% to 13.1%. Return on capital employed was 21.4%. Shareholder returns were $6.6B. Our score is 82 with a buy verdict. That grades the quality of the quarter, not the stock. Repeating this profit level depends on crude staying above $100.
Full Review
Crude prices drove the quarter, but volumes set records too.
Chevron's realized U.S. crude price rose from $47.77 to $70.80 a barrel, and its international realization from $58.88 to $96.41. That means selling the same barrel for roughly 50% more, and at an integrated oil company most of that gap drops straight to the bottom line. Upstream segment earnings jumped from $2.7B to $8.2B. Acknowledging the role of price is not the same as dismissing the quarter, because volumes genuinely stepped up as well. Production of 4.07 million barrels of oil equivalent per day is a 20% annual increase, largely from consolidating the Hess assets for a full quarter. U.S. output of 2.08 million barrels per day is the highest in company history. Management expects 25% better capital efficiency in the Permian than in 2025 — in other words, sustaining the same output on less spending. When prices normalize, this volume-and-cost side is exactly the part that stays.
The Hess integration is running ahead of schedule.
The acquisition passed its first anniversary this month, and the numbers suggest the integration has gone smoothly. On the call, CEO Mike Wirth said the company captured 50% more synergies than initially targeted, with $1.5B realized six months ahead of plan. More importantly, free cash flow from the Hess assets has been roughly double the incremental dividends the deal added. That makes the transaction accretive on a per-share basis. In large mergers the real risk tends to surface after year one, in integration costs, and Chevron appears to have cleared that hurdle for now. The company reaffirmed its 2030 objectives. Those are 2-3% annual production growth and adjusted free cash flow growth averaging more than 10% a year. Return on capital employed is to improve by more than 3%.
Cash flow eased both debt and shareholder pressure.
Operating cash flow of $22.6B left $18.1B of free cash flow after $4.5B of capital spending. That is nearly three times the $6.6B returned to shareholders in the quarter ($3.5B in dividends, $3.1B in buybacks). Chevron used the difference to pay down debt, retiring $8.4B in the quarter and cutting the net debt ratio from 15.6% at the end of 2025 to 13.1%. Debt to operating cash flow stands at 0.8x, or 0.6x on a net basis. The practical meaning: even if crude slides from $100 to $80, the company has built a balance sheet that can absorb it without touching the dividend. The $1.78 per share quarterly dividend payable in September annualizes to $7.12, a yield of roughly 3.8% at the current price. Why free cash flow, not reported profit, is the real backstop for a dividend is covered in our cash flow guide: /rehber/nakit-akisi
Refining and natural gas told two different stories.
Downstream was the quiet hero of the quarter: segment earnings rose from $0.7B to $4.9B, with U.S. refineries setting a record by processing 1.07 million barrels of crude per day. High crude prices normally squeeze refining margins, but product prices rose alongside them this quarter and the plants ran hard, so the result went the other way. Natural gas was the weak spot: the U.S. realized price halved from $1.75 to $0.91 per thousand cubic feet. International gas improved from $7.20 to $7.84, but the U.S. decline partly offsets what oil delivered. Middle East conflict also curtailed output in the Saudi-Kuwait Partitioned Zone. Management put that at roughly 1% of total quarterly production. Events in the Black Sea intermittently affected the CPC pipeline.
The share reaction prices oil, not the results.
The stock closed July 31 up 2.35% at $196.83. For a quarter in which profit nearly quadrupled, that is a modest move. The market's message was clear: this earnings level came with a war premium and is not durable. Sure enough, on August 3 the U.S. stepped back from military action against Iran and signaled talks. Brent fell 5% to $83.50 and Chevron declined three sessions. As of August 6 the stock sits at $189.09, below its pre-results level. The average target among 25 analysts is $216.96, implying 15% upside. Most of those targets were refreshed in the oil-price environment of results day. If Brent settles in the $80s, downward revisions are a possibility. For the next quarter watch one line: the realized U.S. crude price of $70.80. It is a useful reminder that in energy names the source of volatility is usually the commodity, not the company: /rehber/volatilite
Looking Ahead
Strengths and Risks
6 Strengths · 5 RisksStrengths
6- Adjusted EPS rose from $1.77 to $6.06, beating the Market Expectation by roughly 8%.
- Production of 4.07 million barrels of oil equivalent per day rose 20%, with company records in U.S. output and refinery throughput.
- Free cash flow of $18.1B was nearly three times the $6.6B returned to shareholders.
- Hess synergies came in 50% above target and six months earlyThe $3B structural cost reduction was also completed ahead of schedule.
- $8.4B of debt retired in the quarter cut the net debt ratio from 15.6% to 13.1%Return on capital employed was 21.4%.
- 2026 organic capital spending was narrowed to the low end of the $18-19B range, with 25% better Permian capital efficiency expected.
Risks
5- Most of the profit came from a $104 average Brent priceCrude fell to $83.50 on August 3, making that level unrepeatable.
- U.S. realized natural gas prices halved, from $1.75 to $0.91 per thousand cubic feet.
- Middle East conflict curtailed production in the Saudi-Kuwait Partitioned Zone, about 1% of quarterly output, and Black Sea events intermittently disrupt the CPC pipeline.
- Buyback and dividend capacity is tied directly to the oil priceA sustained low-price environment would narrow shareholder returns.
- Most analyst targets were set in a high-oil environment and face downward revision risk if peace talks progress.
What to Watch
4- September 10, 2026The $1.78 per share quarterly dividend is paid, annualizing to $7.12 or roughly 3.8% at the current price.
- August-September 2026The U.S.-Iran negotiating track will set oil's direction, and Brent settling in the $80s would pull Q3 earnings well below Q2.
- Late October 2026Third quarter results, where the thing to watch is whether production records hold as realized prices come down.
- End of 2026Whether organic capital spending finishes at the low end of the $18-19B range, and whether Hess synergies hit their second-year target.
Upcoming Earnings
To Understand This