By Daniel Gilbert
Chevron Corp. is scheduled to report earnings for the second
quarter Friday morning. Here is what you should know:
EARNINGS FORECAST: Net income of $1.16 per share is the
consensus of analysts surveyed by Tho mson Reuters, compared with
$2.98 in the prior-year period.
REVENUE FORECAST: Revenue of $30.9 billion is forecast for the
quarter, compared with $57.9 billion a year earlier.
WHAT TO WATCH:
CASH FLOW: Chevron has been spending cash faster than it comes
in. In the first quarter of the year, the company spent four times
as much on capital expenditures and dividend payments as it
generated in cash from operations. Will the company plug this gap
with higher cash flow, more debt or deeper cost cutting?
GORGON: The biggest boost to Chevron's production is expected to
come from the Gorgon liquefied natural gas project in Australia,
which is scheduled to start up later this year. Any delays or
further cost overruns on the $54 billion project would be a blow to
the company.
BIG FOOT: Chevron suffered a big setback in May when equipment
failed while installing its Big Foot platform in the Gulf of
Mexico. That means the company won't start up the project by the
end of 2015 as it had planned. Analysts are likely to ask for
details about what went wrong and how this impacts Chevron's oil
and gas production targets moving forward.
Write to Daniel Gilbert at daniel.gilbert@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires