Please ensure Javascript is enabled for purposes of website accessibility

Chevron Works to Protect its Dividend in Challenging Environment

By Howard Smith – May 1, 2020 at 10:26AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Chevron announced first quarter earnings today, along with actions to preserve cash while also prioritizing the dividend.

In its first quarter results announced today, energy giant Chevron's (CVX 3.89%) global oil production was up by 6% versus the year ago period, but total revenue declined 12%. Nevertheless, earnings were up from a year ago due to improved downstream margins and Permian Basin production increases. 

Oil prices plunged near the end of the quarter, when oil demand plunged due to COVID-19. Chevron says it is "responding to these unprecedented challenges by making changes to what we control." Specifically, Chevron announced a further $2 billion drop in capital spending for 2020, after previously announcing a 20%, or $4 billion, reduction. 

deep sea oil rig

Image source: Getty Images.

Dividend is priority

Chevron is still trying to maintain its dividend among reductions in capital expenditures, suspension of share repurchases, and $1 billion in operating expense cuts, however. Chevron Chairman and CEO Michael Wirth said that protecting the dividend is a financial priority, along with maintaining a strong balance sheet, and increasing a focus on capital spending.

The company has generated over $1.6 billion in proceeds so far this year from asset sales completed in March and April, as it works to shore up its financial position. Cash flow from operations for the quarter was down 8% from the year ago period. 

CEO Wirth said the safety of its people and operations were the focus during the ongoing pandemic. "Our products support the efforts of healthcare providers and first responders around the globe and fuel the transportation that keeps global supply chains moving," he concluded.


Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chevron Corporation Stock Quote
Chevron Corporation
$157.63 (3.89%) $5.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.