Chevron returned $6.0 billion to shareholders in the quarter, even as reported profit fell to $2.2 billion, its weakest five-year result. Adjusted first-quarter earnings were $1.41 a share, topping analyst forecasts, but the headline numbers were weighed down by roughly $2.9 billion in negative timing effects tied to derivatives and inventory accounting. Shareholder payouts included $2.5 billion in buybacks and $3.5 billion in dividends, and the company declared a $1.78 quarterly dividend payable June 10, 2026. CFO Eimear Bonner said about $1 billion in open paper positions are on track to close at a gain in the current quarter, and reiterated a goal to lift adjusted free cash flow at least 10% per year through 2030.

Chevron’s first-quarter report shows a split picture. Adjusted earnings beat expectations. Reported profit dropped sharply year on year.

Earnings and the math behind them

The company said reported net income was $2.2 billion for the quarter, down from $3.5 billion in the same period a year earlier. When Chevron strips out one-off and timing items, adjusted earnings per share came to $1.41. That topped the consensus estimate of about 95 cents a share.

That gap between reported and adjusted figures traced largely to a timing mismatch on derivatives and inventory. Chevron attributed about $2.9 billion of the quarter's drag to those accounting effects. International refining showed the heaviest pain, swinging to roughly a $1 billion loss from a $222 million gain a year earlier. Higher transport costs and thinner margins also hit refining results.

At the same time, upstream operations provided offsetting strength. Domestic upstream earnings rose to $2.112 billion from $1.858 billion a year earlier. Worldwide production climbed about 15% year on year to the equivalent of roughly 3.858 million barrels of oil per day, the company said.

Cash returns and capital allocation

Shareholders received $6.0 billion during the quarter. That included $3.5 billion in dividends and $2.5 billion in share buybacks.

It marked the 16th straight quarter in which combined cash returns exceeded $5 billion.

Chevron declared a quarterly dividend of $1.78 per share, payable on June 10, 2026. Capital spending for the quarter was $4.1 billion, up from $3.9 billion a year earlier. The company said some of that lift reflected outlays tied to its acquisition of Hess, and that was partially offset by a pullback in the Permian Basin.

CFO on hedges and the paper positions

CFO Eimear Bonner addressed the timing losses directly. She said roughly $1 billion of open, paper positions are on track to be closed at a gain during the current quarter. Bonner also reiterated the company’s target to grow adjusted free cash flow by at least 10% per year through 2030.

Mastheads

The timing items stem from the gap between when the company placed financial hedges and when the physical cargoes reach customers. In some cases, gains locked in by hedges were not matched by the proceeds from deliveries inside the quarter. That created accounting losses that Chevron expects to unwind in later periods, when deliveries complete and the hedges settle.

Geopolitical context and operational exposure

The first quarter included sharp swings in global oil markets after the conflict in the Middle East began on February 28. Crude prices spiked, and energy markets tightened. The disruption pushed global oil prices much higher during the quarter and introduced volatility into cargo flows and logistics.

Chevron said its direct exposure to Middle East production is limited and stands at a small share of total output. Still, the company noted some sequential production dips and the usual knock-on effects on refining and shipping. The firm’s CEO, Mike Wirth, said the quarter highlighted the resilience of Chevron’s portfolio and the value of disciplined execution with increased geopolitical volatility.

Upstream businesses, especially in the U.S., delivered stronger cash earnings. American oil and gas output held above 2 million barrels of oil-equivalent a day for the third straight quarter, supporting domestic upstream margins. Global production growth and volumes from new projects, including assets added through the Guyana stake, helped the top line.

Refining and trading results carried the losses in the quarter. International refining swung into the red due to weaker margins, higher transportation costs, and the timing mismatches from hedges. Those effects were the largest single drag on reported profits.

Chevron continued to prioritise cash returns. Management delivered a steady dividend and sizeable buybacks even as reported profit fell. The firm argued the accounting distortions tied to hedges don't reflect an underlying collapse in cash generation.

Bonner’s comments on closing paper positions at a gain were meant to reinforce that view. If those positions settle favourably, part of the accounting loss recorded this quarter should reverse in subsequent quarters as the company recognises the corresponding physical deliveries and hedge settlements.

Capital expenditure rose modestly versus last year. Chevron pointed to project spending related to acquisitions while trimming activity in some U.S. Shale pockets. The company kept its focus on free cash flow growth as the main long-term benchmark, and it repeated the aim of at least 10% annual growth in adjusted free cash flow to 2030.

That target shapes how Chevron balances investment, dividends and buybacks. Management framed the current quarter’s buybacks as part of a steady return-of-cash programme that preceded and will continue despite volatile market swings.

Shares moved modestly in premarket and session trading around the release. Traders and investors have been pricing in both the short-term accounting effects and the prospect of hedges settling in later quarters. Analysts will be watching upcoming quarters to see how much of the timing drag reverses and how much reflects lasting margin pressure in refining.

Management left the door open on future actions, pointing to the pipeline of asset cash flows, ongoing project delivery and the size of buyback programmes as levers to manage shareholder returns.

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Chevron declared a $1.78 quarterly dividend, payable June 10, 2026.

This article was created with AI assistance.