Chevron 2011 4Q financial analysis

Companies 4Q results are negative. Although revenue has increased by 12% if comparing with 2010 4Q from 51,9 bn.$ to 58,0 bn.$ but compared to peak 2Q 66,7 bn.$ revenue has decreased by -13%. Net Income before depreciation has decreased by -3% even when comparing with 2010 4Q. If compared with last quarter it decreased by almost -24% from 11 bn.$. Company explains that decrease is driven by decrease in industry refining margin. In general companies results are negative.

Equity level has increase a little bit from 57% to 58% due to part of generated Net income left in the company. ROE and ROA ratios has dropped a lot at Q4. ROE from almost 26% to 17% ROA from 15% to 10%. Hopefully it is not long term trend.

Inventory level 5,5 bn.$ turnover 9 days. Account payable 21,8$ turnover 34 days. Both in line.

Generated Net Income before Depreciation is mostly used for investments into long term asset. In total at Y2010 long term investments reach 32 bn.$ or 82% out of generated 39 bn.$ Net Income before Depreciation. Part of long term investments was financed by long term liability growth, a specially at Q4 +4 bn.$. Cange in Equity is quit balanced. At Y2011 -11 bn.$ or 28% of generated Net Income before Depreciation. In general companies balance structure is acceptable.

 

Share value:

Common Stocks	17,0 bn.$	1,981 bn.	8,6 $
+ Retained earnings	104,4 bn.$	+ 52,7 $	61,3 $
+ 1 year Net income before Depreciation	39,8 bn.$	+ 20,1 $	81,4 $

 

Companies share basic value is ~61$.  Current market price is 110$ which shows that market is paying 49$ more or 2,4 years of Net income before Depreciation earnings. Share profitability (share market price/Net income before Depreciation) is 18%.

Company at the moment pays 3,24$/share annual dividends (0,81$/quarter) before tax or 2,9% investment yield. Since profit shows decrease in past few quarters predicted future dividend level should stay the same or even decrease a bit if profit decrease will continue for longer time.

Analysis source: Chevron 2011 4Q 10-K financial statements

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