Chevron (CVX) reported net income of $12.07B for the second quarter ended June 30, 2026, compared with $2.49B a year earlier, and free cash flow of $18.09B. The drivers of the jump are not established in our evidence, and the next test is the third-quarter report due Oct. 30, 2026.
Key facts
- Q2 FY2026 (ended June 30, 2026): revenue was $67.20B, operating income $21.48B, and diluted EPS $6.11 (earnings per share, profit divided by shares outstanding).
- Earnings-day beat (July 31, 2026): Chevron reported EPS of 6.06 against an analyst estimate of 5.55, a beat of $0.51, or 9.2%.
- Share price: $232.01 at the latest quote on Oct. 26, 2026, down 0.51% that day. The 52-week range is $146.49 to $234.08.
- Next report: Oct. 30, 2026, with analysts estimating EPS of 4.86 and revenue of $61.33B.
- Stock Expert AI MoonshotScore V2: 72.2, rated Strong.
What happened
A general framework. Integrated oil companies like Chevron pump oil and gas ("upstream") and also refine it and sell fuels and chemicals ("downstream"). In general, such companies have costs that are fairly fixed in the short run while selling prices can move a lot, so earnings can swing by more than revenue does, in either direction. This is a general way integrated majors' earnings can behave, not an explanation of this quarter. The drivers of Chevron's Q2 result are not established in our evidence.
The numbers. Revenue in the second quarter of fiscal 2026 was 51.4% higher than a year earlier, and net income was 384.8% higher. Profit grew far faster than sales. Operating margin (operating income as a share of revenue) was 32.0%, against 9.1% in the year-ago quarter.
One note on the data: the figures reported on July 31 differed from those in the later filing dated Aug. 6. The earnings-day report showed revenue of $70.06B, which beat the analyst estimate of $62.72B by $7.33B, or 11.7%. The filed quarter shows $67.20B. This article uses the filed figures for the quarter and the earnings-day figures only for the comparison with estimates.
Where the revenue came from. Segment data point to the change being concentrated downstream, but they should be read with caution. Reported downstream revenue was $49.65B in the second quarter of 2026, against $18.71B in the year-ago quarter. Upstream revenue was $17.53B, against $10.38B. The "All Other" category was small, at $25.0M. However, the year-ago segment figures do not add up to the $44.38B of total revenue reported for that quarter, and FMP's geographic breakdown for the second quarter of 2026 (downstream $28.50B, upstream $18.52B) differs from its segment figures. The segment data may therefore not be comparable across periods. We have no company release or call transcript in our data for this piece, so we cannot quote management on the reasons. The segment split suggests where the change may have happened, not why.
The trend. Margins were steady and modest for three quarters, then fell, then jumped:
| Quarter (ended) | Revenue | Operating margin | Net income | |---|---|---|---| | Q2 FY2025 (June 30, 2025) | $44.38B | 9.1% | $2.49B | | Q3 FY2025 (Sept. 30, 2025) | $48.17B | 8.9% | $3.54B | | Q4 FY2025 (Dec. 31, 2025) | $45.79B | 8.8% | $2.77B | | Q1 FY2026 (March 31, 2026) | $47.56B | 6.8% | $2.21B | | Q2 FY2026 (June 30, 2026) | $67.20B | 32.0% | $12.07B |
The first quarter of 2026 was the weakest of the group, with a gross margin of 9.6% against 31.8% in the prior quarter. The second quarter reversed that, with a gross margin of 45.5%.
Cash flow followed. Operating cash flow was $22.63B in the second quarter of 2026, against $2.51B in the first quarter. Capital spending stayed in a similar range, at $4.54B in the second quarter and $4.06B in the first. In the first quarter, free cash flow (cash left after capital spending) was negative $1.55B. In the second quarter it was $18.09B. Shareholder payouts barely moved: buybacks were $3.00B and dividends $3.50B in the second quarter, against $2.57B and $3.53B in the first. The company kept paying throughout, and in the weak quarter it funded those payouts from sources other than free cash flow.
Why it matters for investors
Balance sheet. As of June 30, 2026, Chevron held $8.53B in cash and short-term investments against $37.08B of total debt, leaving net debt of $28.55B. Debt to equity was 0.20, and shareholders' equity was $189.88B. The Altman Z-score (a bankruptcy-risk gauge, where higher is safer) was 3.94, and the Piotroski score (a 0-9 financial health check) was 6.
Valuation versus peers. On a trailing 12-month basis, Chevron trades at a price-to-earnings ratio (share price divided by yearly earnings per share) of 22.16, with EV/EBITDA of 8.75, price-to-free-cash-flow of 16.97, and a dividend yield of 3.0%. Its net margin is 9.9%. Peers on the same basis:
| Company | P/E | Net margin | |---|---|---| | Chevron (CVX) | 22.16 | 9.9% | | BP | 24.42 | 2.5% | | Eni (E) | 10.40 | 8.7% | | Equinor (EQNR) | 13.20 | 7.9% | | Imperial Oil (IMO) | 21.07 | 7.8% |
Chevron has the highest net margin in this group, and its P/E is below BP's and above the other three peers listed. Because trailing earnings include the unusually strong second quarter, the P/E partly reflects that single period.
Analysts. Of 53 ratings, 33 are Buy, 16 are Hold and 4 are Sell, for a consensus of "Buy." The average price target is $214.08, the median is $224.00, the high is $243.00 and the low is $90.00. The share price of $232.01 is above the average and the median target. FMP's own discounted cash flow model (an estimate of value from projected cash) gives $168.91 per share, though such models depend heavily on their inputs. Rating actions in the last 30 days included maintained ratings from Morgan Stanley (Overweight) on Oct. 15, TD Cowen (Hold) on Oct. 12, and UBS (Buy) on Oct. 8, 2026.
MoonshotScore. Stock Expert AI's MoonshotScore V2 is 72.2, rated Strong. Its sector-relative pillars are momentum 85, safety 78, valuation 63, quality 61 and growth 45. Momentum and safety are the strong areas, matching the recent price strength and the debt-to-equity ratio of 0.20. Growth is the weakest pillar.
What could go wrong
- The quarter may not repeat. Margins went from 9.1% to 32.0% in a year, and a swing back is possible. The estimate for the Oct. 30 report, EPS of 4.86 and revenue of $61.33B, is below the second-quarter actuals.
- The downstream jump is unexplained. Reported downstream revenue rose from $18.71B to $49.65B, and gross margin went from 9.6% in Q1 FY2026 to 45.5% in Q2 FY2026. Reported revenue of $70.06B also differs from filed revenue of $67.20B, and the segment data do not reconcile with total revenue. Our sources do not explain the size of this move. It could reflect one-time items, accounting or segment changes, or other factors, so the quarter should not be read as a clean run-rate.
- Price already reflects a lot. The stock sits near the top of its 52-week range and above the average analyst target.
- Insiders are not buying. Among the 30 most recent insider filings, those in the last 90 days show 0 open-market purchases and 8 sales. Insider sales are often routine, but there are no purchases to offset them.
- Weak growth score. The growth pillar of 45 is the lowest of the five.
What to watch next
- Oct. 30, 2026 results: whether EPS lands near the 4.86 estimate, and whether downstream revenue stays well above its year-ago level.
- Margins: whether operating margin stays far above the 6.8% to 9.1% range of the prior four quarters.
- Free cash flow: whether it covers both dividends and buybacks, as it did in the second quarter.
- Management commentary: what executives say about drivers and capital spending, which we have not been able to review for this piece.
- Upstream projects: Zacks reported on Oct. 26 that Chevron's Nargis-2 results expand Egypt's offshore gas potential. This is qualitative context on the upstream business and is not tied to the second-quarter figures.
Frequently asked questions
Q: How much did Chevron earn in the second quarter of 2026?
Chevron's net income was $12.07B for the quarter ended June 30, 2026, with diluted EPS of $6.11. In the year-ago quarter, net income was $2.49B and diluted EPS was $1.45.Q: When does Chevron report next, and what do analysts expect?
Chevron is due to report on Oct. 30, 2026. Analysts estimate EPS of 4.86 and revenue of $61.33B. In July, the company beat the EPS estimate of 5.55 with a reported 6.06.Q: Is Chevron expensive compared with other oil companies?
On a trailing 12-month basis, Chevron's P/E is 22.16. BP is at 24.42, Imperial Oil at 21.07, Equinor at 13.20 and Eni at 10.40. Chevron's net margin of 9.9% is the highest in that group. Analysts' average price target is $214.08, below the latest share price of $232.01. This is information, not advice.This is educational content, not investment advice. Past performance does not guarantee future results.