Chevron (CVX) began 2025 with solid operational performance, though financial results reflected a more challenging environment. In Q1 2025, the company reported net income of $3.5 billion ($2.00 per diluted share), a decline from $5.5 billion ($2.97 per share) a year earlier, amid lower commodity prices and tighter downstream margins. On an adjusted basis, earnings were $3.8 billion ($2.18 per share), also down from $5.4 billion in Q1 2024.

Total revenue and other income dipped slightly to $47.6 billion, while cash flow from operations fell to $5.2 billion, compared to $6.8 billion the previous year. Free cash flow saw a more significant contraction, dropping to $1.3 billion from $2.7 billion. The company’s return on capital employed decreased to 8.3%, down from 12.4%, reflecting softer earnings.

Chevron’s Upstream segment remained its earnings engine, contributing $3.8 billion, though still below the $5.2 billion in Q1 2024. Both U.S. and international upstream operations posted lower results, with the international segment seeing a sharper drop. Downstream earnings came in at $325 million, less than half of last year’s $783 million, weighed down by reduced international throughput and margins, as well as planned maintenance.

Operationally, Chevron marked several key milestones. Permian Basin output continued to rise with greater efficiency, and the company achieved first oil from the Ballymore project in the Gulf of Mexico on schedule. In Kazakhstan, the long-anticipated Future Growth Project at Tengizchevroil was completed and is ramping toward full capacity. Additionally, Chevron divested a majority stake in its East Texas gas assets as part of its ongoing portfolio optimization strategy.

In the Downstream segment, U.S. refineries benefited from capacity enhancements, with crude inputs up 16% year-over-year and refined product sales rising 4%. Internationally, however, refinery inputs fell 5%, largely due to maintenance in South Korea, with refined product sales down 2%.

On the capital side, Capex totaled $3.9 billion, slightly below the prior year's $4.1 billion, with $2.8 billion directed to U.S. operations. Shareholder returns remained robust at $6.9 billion, including $3.0 billion in dividends and $3.9 billion in buybacks. Chevron also acquired $2.2 billion in Hess shares during the quarter. The balance sheet showed cash and equivalents at $4.6 billion, while total debt rose to $29.7 billion, pushing the net debt ratio to 14.4% from 10.4% at year-end 2024.

CEO Mike Wirth highlighted Chevron’s long-term commitment to shareholder value, citing over $78 billion returned over the past three years. He underscored progress on structural cost savings — targeting $2–3 billion by 2026 — through asset sales, automation, and digital efficiencies. Looking ahead, production growth is expected to accelerate in the second half of 2025, powered by major project ramp-ups in the Gulf of Mexico and Kazakhstan. Management reaffirmed its guidance of $14–16 billion in annual Capex, with continued focus on capital discipline and free cash flow growth.