Chevron is one of the largest oil companies in the world. The California-based oil company has divided its operations into upstream and downstream activities. Upstream activities account for 85% of its earnings while downstream earnings constituted 15% of total FY12 earnings. Upstream earnings have experienced an average annual growth rate of 10% over the last five year span whereas downstream earnings experienced growth of a little over 4%. Chevron generated $223 billion in revenues and $26 billion in earnings in 2012, recording the highest five-year earnings growth in comparison to other integrated oil companies.
Industry: Oil Gas and Consumable Fuels
Sub-industry: Integrated Oil and Gas
Fiscal Year Ends: December 31.
Chevron Corporation History
Chevron’s main predecessor is Standard Oil of California (SoCal), a spin-off of Rockefeller’s Standard Oil Company. In 1984, California Standard Oil merged with Gulf Oil, and later on adopted the name of one of its prominent brands - Chevron. Since then, Chevron has been involved in many mergers and acquisitions, the most notable being Texaco. Chevron took up the moniker ChevronTexaco, but later on dropped Texaco from the company name and reverted back to the previous version.
Chevron General Overview
Chevron is an integrated oil company (IOC), and is involved in all the oil value chain processes. Oil value chain process starts with upstream activities (exploration and production activities) and ends at downstream activities (refining and marketing of petroleum-related products). It is the largest integrated oil company - excluding national oil companies - in the world in terms of oil and natural gas reserves as well as refining capacity.
Brand names: Chevron, Texaco and Caltex
Employees (FY12): 62,000
CEO: John S. Watson
Global Headquarters: San Ramos, California, USA
Chevron Business Segments
Chevron has divided its business into three segments: Upstream, Downstream and Other Businesses. The upstream segment is made up of exploring, developing oil and gas reserves, and producing oil and gas. Refining crude oil produced from upstream activities into commercially usable products and then marketing them to their end-users falls under the downstream segment.
Note: Earnings contributions include losses not categorized in two segments mentioned above, including losses from debt financing, corporate administrative functions etc. Losses in the “All Others” head amounted to 7% of total earnings.
Chevron Financial Performance
Market capitalization (As of October 30, 2013): $235bn.
• Revenue (FY12): $222.6bn
• Revenue 5yr CAGR (FY 07-12): 1.8%
• Net income (FY12): $26.2bn
• Net income 5yr CAGR (FY 07-12): 6.97%
• P/E (current): 10.3x
• Annual dividend yield:3.30%
Note: Revenue calculation excludes sales-tax that adds to revenue generated from oil produced and revenues from affiliates in which Chevron has a minor stake.