Chevron Delivers, But Traders Look Out Of Gas (CVX)

October 31, 2008 by Douglas A. McIntyre

Chevron_logoToday we got earnings from oil giant Chevron Corp. (NYSE: CVX).  The company posted earnings of $7.89 billion for the quarter, which translates to $3.85 per share.  That is well above the same quarter results from 2007 where the company posted $3.72 billion, or $1.75 per share.  It is also well above the analyst target of $3.25 EPS from First Call.  There was also close to a 50% gain in revenue to $78.8 billion in revenues.

What is more interesting than its actual earnings is the reaction weare seeing today.  After a $12.00 gain this week alone, we’d besurprised if Chevron moves much higher.

Even if the company now just manages to meet earnings targets for the current quarter, the stock will trade with a very low relative P/E ratioof roughly 6- to 7-times earnings.  The earnings beyond this year aregoing to be highly dependent upon oil prices, but we’d also note that amore range-bound oil price would be far better for the large oilcompanies.

Jon C. Ogg
October 31, 2008