For questions about this article or underlying research, email help@trefis.com.
Shares of Chevron (CVX) rose 1.8% on October 30, 2026, the day the company reported fiscal Q3 2026 results, while the S&P 500 fell 1.8%. By November 6, the stock had fallen 8.1% from its close before the report, compared with a 4.4% decline for the index. Profit fell from the second quarter, yet it remained nearly three times its level a year earlier. So what is Chevron doing with the extra money?
Image from Pixabay
Chevron Used The Extra Money To Cut Debt
On the October 30 call, management said Chevron cut its debt by more than $3 billion in the quarter and added more than $4 billion to its cash. Buybacks did not rise alongside those moves. Management said the company kept its buyback rate at $2.5 billion to $3 billion and intends to stay within that range. Chevron bought back $11.1 billion of shares in the four quarters to September.
On report day, Chevron’s advance slightly trailed the gains at Exxon Mobil and ConocoPhillips, which rose 2.2% and 2.7%.
Over the past twelve months, Chevron’s free cash flow equaled 8.2% of its market value, while its dividends and buybacks together totaled 6.0%. The company is retaining more cash than it hands back, and its debt has declined. Total debt stood at $33.5 billion at the end of September, compared with $41.5 billion a year earlier.
Has Chevron’s Bigger Profit Lasted More Than Two Quarters?
Not yet. Chevron earned $2.21 billion in the first quarter of 2026, before profit jumped to $12.1 billion in the second quarter and settled at $9.92 billion in the third. On management’s own measure, adjusted earnings were $10.4 billion, down $1.6 billion from the second quarter. Management said upstream earnings fell on lower prices and lower volumes sold, while downstream earnings rose on higher refining margins and volumes.
Chevron has earned profit this high before, and it faded. Since 2021, only the twelve months to September 2022, at $34.2 billion, brought more profit than the latest twelve-month stretch. Profit then fell in each of the years to September 2023, 2024 and 2025. Investors now pay 15.4 times the past twelve months’ earnings for the shares, compared with 21.8 for the S&P 500, and those twelve months include both big quarters.
What Did Chevron’s Management Say About The Months Ahead?
Management said Chevron will not change how it spends cash while prices swing this widely. Prices ranged from as low as $68 to as high as $132 a barrel within the third quarter, so the company is changing nothing in the short term, and growing the dividend stays its first priority.
On refining, management expects margins to stay elevated in the short term, with 10% of the world’s refining capacity offline. It also called refining and chemical margins very difficult to predict. Chevron said turnarounds and downtime would cut its fourth-quarter upstream output by 175,000 to 225,000 barrels of oil equivalent a day.
The fourth quarter brings one known charge. Management expects a transaction to close at the end of the quarter that takes $3.7 billion of debt off Chevron’s books and lifts its Bakken upstream earnings in 2027. Chevron will then report a one-time non-cash loss of $3 billion to $4 billion, a special item management said reflects only the accounting.
With that loss set apart, the figure to watch when Chevron reports in January 2027 is fourth-quarter adjusted earnings, against $10.4 billion in the third quarter.
Paid In Chevron Stock?
Many readers of a Chevron article work there and own its stock through grants or a purchase plan. When your paycheck and your savings depend on the same company, one bad year can hit both. Our partner advisory firm offers a free strategy review of ways to protect a large company-stock position and sell it down with less tax.
Request A Free Strategy Review
Spot an error or want more like this? Tell us in 10 seconds.
Source: www.trefis.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
