Chevron Corp Stock In Focus After Firm Announces Restructuring Charges Of Up To $1.5B In Q4: Retail Stays Confident

Shares of energy major Chevron Corp (CVX) were in focus on Friday after the company disclosed it expects to take restructuring charges of $1.1 billion to $1.5 billion in the fourth quarter of 2024.

Chevron said it expects to recognize a restructuring charge of $0.7 to $0.9 billion after-tax in Q4, with associated cash outflows over the next two years.

The firm also anticipates recognizing non-cash, after-tax charges related to impairments, asset sales, and other obligations of $0.4 to $0.6 billion in the quarter.

Chevron said it expects to treat these as special items and exclude them from adjusted earnings.

“It is possible that the financial impact of these items may differ from the estimates provided, including differences due to final accounting determinations, changes in facts, circumstances or assumptions or other developments in the interim,” the company said.

The restructuring is part of the firm’s recently announced plans to achieve $2 to $3 billion in structural cost reductions by the end of 2026.

Following the disclosure, retail sentiment on Stocktwits jumped into the ‘bullish’ territory from ‘bearish’ a day ago.

The company also announced its 2025 organic capital expenditure range of $14.5 to $15.5 billion for consolidated subsidiaries (capex) and an affiliate capital expenditure (affiliate capex) range of $1.7 to $2.0 billion for 2025. This reflects a $2 billion reduction year-over-year, it said.

CEO Mike Wirth said the firm continues to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth.

Chevron’s upstream spending is expected to be about $13 billion, of which approximately two-thirds is allocated to develop its U.S. portfolio. The company expects a lower spend for its Permian Basin, between $4.5 and $5.0 billion, as production growth is reduced in favor of free cash flow.

Downstream capex is expected to be approximately $1.2 billion, with two-thirds allocated to the U.S.

Following the announcement, CVX shares were trading marginally in the red on Friday morning. The stock has gained over 6% on a year-to-date basis.

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