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Chevron buys back $75 billion in stock after record profits

(Bloomberg) — Chevron Corp . plans to buy back $75 billion in shares and increase dividend payouts after a year of record profits that drew angry condemnations from politicians around the world as soaring energy prices squeezed consumers.

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The share buyback program will start on April 1 and will be three times the size of the previous authorization unveiled in early 2019, the company said in a statement on Wednesday. The program is equivalent to nearly a quarter of the company’s market value and five times the current level of annual buybacks.

Although Chevron’s plan pales in comparison to the $89 billion that Apple Inc. allocated for buyback in the past year, it is likely to inflame critics who have accused the oil industry of war profiteering after Russia’s invasion of Ukraine sent energy prices soaring.

President Joe Biden was among those lambasting oil explorers for allocating money to shareholder-friendly initiatives like dividends and buybacks instead of plowing it into more wells that would swell with crude oil. Chevron rose as much as 3.9% in after-hours trading.

“For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders is certainly a strange way to show it,” said Abdullah Hasan , a White House spokesman. in a statement Wednesday evening. “We continue to call on the oil companies to use their record profits to increase supply and reduce costs for the American people.”

The company will also pay investors a dividend of $1.51 per share. stock on March 10, up 6.3% from the previous quarter.

Although energy prices have pulled back since the early stages of Russia’s attack on Ukraine, analysts expect U.S. oil companies’ profits to remain strong because they have kept capital spending in check, unlike past booms. Instead, the windfall has been used to pay back debt and increase investor returns.

Chevron raised share buybacks several times last year as oil prices rose, but Chief Financial Officer Pierre Breber has vowed to maintain the buyback rate even as commodity prices retreat. With net debt currently below the company’s target range, Chevron is willing to let borrowing levels rise to keep buying back stock if needed, Breber said last year.

The company announced last year that capital spending for 2023 will be at the upper end of its guidance range of $17 billion. Chevron is scheduled to report fourth-quarter results on Jan. 27.

–With assistance from Tom Contiliano and Justin Sink.

(Updates with White House reaction, in episode five.)

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