Chevron to buy back $75 billion in stock after record profit

(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 rising energy prices squeezed consumers.

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The share buyback program will begin on April 1 and will be triple the size of the previous authorization unveiled in early 2019, the company said in a statement on Wednesday. The program is equivalent to nearly one-fourth 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 Apple Inc. allocated to buybacks in the past year, it is likely to anger 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 who criticized oil explorers for spending cash on shareholder-friendly initiatives like dividends and buybacks instead of plowing it into more drilling that would boost crude supplies. Chevron rose as much as 3.9% in after-hours trading.

“For a company that not too long ago claimed it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders is certainly an odd way to show it,” said Abdullah Hasan, ‘ a White House spokesman said. in a statement Wednesday night. “We continue to call on 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 on March 10, an increase of 6.3% from the previous quarter.

Even though energy prices have retreated since the early stages of Russia’s attack on Ukraine, analysts expect US oil companies’ profits to remain strong because they have reined in capital spending, unlike in previous boom cycles. Instead, the windfall was used to repay debt and increase investor returns.

Chevron increased 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 ratios currently below the company’s target range, Chevron is willing to raise debt levels to continue buying back shares if needed, Breber said last year.

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

–With help from Tom Contiliano and Justin Sink.

(Updates with response from the White House, in fifth paragraph.)

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