Chevron is noting down as much as $11 billion value of assets, and it might cost the whole market. The senior index analyst Howard Silverblatt at S&P Dow Jones Indices stated that relying on the ultimate cost; it might reduce 2019′s fourth-quarter total S&P 500 earnings by $1.32 per share.
That might represent a big chunk of the fourth quarter’s earnings as corporations within the index are estimated to earn $40.40 a share within the present quarter, in accordance with S&P Dow Jones. The entire S&P 500 is expected to earn $158.50 a share for the complete year, according to estimates.
This can be a big influence for the 24th-largest company within the index.
On Tuesday, Chevron said that the write-down of between $10 billion and $11 billion could be for the present quarter as the corporate revalues a few of its assets, including shale gas production sites in Appalachia and deep-water projects within the Gulf of Mexico.
The nation’s second-largest oil company additionally introduced a $20 billion capital spending budget for 2020 and mentioned it was contemplating offloading a few of its natural gas projects as prices proceed to falter.
Additionally, take a look at the assets evaluated and which assets will deliver the highest returns on investment for the shareholders and the assets within the Northeastern U.S., along with some in Canada and other different parts of the world simply don’t compete well for the investment dollar as others do.
Last month, Chevron reported a 36% drop in third-quarter profit, hit by lower oil and gas costs and refining margins. It additionally warned higher prices would have an effect on fourth-quarter results.
Chevron shares have gained 8% this year, outpacing the S&P energy sector’s 4% rise.