Will Chevron Earnings Move the Dow?

With hundreds of companies having reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk decision.

Let's turn to Chevron (NYSE: CVX  ) . The oil giant has avoided the trend that many of its peers have followed, remaining an integrated oil company with both exploration and production capabilities and downstream refining and marketing operations. That's been a lucrative combination: The stock has hit all-time highs recently despite gaining just 5% in 2012, lagging behind the Dow Jones Industrial Average (DJINDICES: ^DJI  ) . Let's take an early look at what's been happening with Chevron over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Chevron

Analyst EPS Estimate

$3.03

Change From Year-Ago EPS

17%

Revenue Estimate

$68.64 billion

Change From Year-Ago Revenue

14.4%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo Finance.

Will Chevron energize its stock?
Analysts have lowered their estimates for Chevron's fourth-quarter report somewhat over the past three months, with earnings-per-share guesses dropping by $0.08. But the stock has done quite well since the company's last earnings report, climbing about 6% since late October.

We've already seen a performance update from Chevron that shares some highlights of the quarter. Domestic production rates through November showed 2% gains from last year, although international production fell year over year. Yet because of the higher natural-gas prices in international markets, Chevron saw price improvement over the year-ago quarter. The same trend showed itself in the refining segment, with U.S. results improving while international figures disappointed investors.

In the longer term, Chevron has been dealing with some of the same problems that have plagued other companies: lower oil and natural-gas prices combined with declining production. Yet unlike ExxonMobil (NYSE: XOM  ) , which is projecting year-over-year declines in revenue and relatively flat profits, Chevron has made progress over its year-ago quarter.

Part of Chevron's success has come from diligent efforts to boost its assets. Working with Noble Energy (NYSE: NBL  ) , Chevron will participate in exploration activity in deepwater zones off the Sierra Leone coast in West Africa, and its purchase of nearly a quarter-million acres in New Mexico from Chesapeake Energy (NYSE: CHK  ) could lead to extensive production expansion if Chevron can capitalize on new production methods from the Permian Basin. Eastern Europe has also been a promising place for Chevron as it looks at various shale gas plays.

For Chevron to keep rising to new highs, it needs to deliver an earnings report that challenges the larger Exxon on its own turf. With recent forays into China, Lithuania, and Morocco, so long as its expansion plans continue to do well, Chevron has the capacity to go higher from here.

Can Chevron get more from Chesapeake?
Chevron's deal with Chesapeake in the Permian Basin has been good for Chevron, but what's in Chesapeake's future? Find out what CEO Aubrey McClendon's impending departure means for Chesapeake by reading the Motley Fool's brand-new premium report on the company. Simply click here now to access your copy, and as an added bonus, you'll receive a full year of key updates and expert guidance as news continues to develop.

Click here to add Chevron to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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