Chevron Corp. (CVX) reported better-than-expected second-quarter 2009 EPS of $1.10, surpassing the Zacks Consensus Estimate of 95 cents per share. Contribution from increased production of crude oil and natural gas due to the start-up of new projects has more than offset the sharp decline in commodity prices.

While a weak oil price environment may weigh on the stock over the coming weeks, given its strong pipeline of development projects and impressive recent exploration successes, the company’s long-term outlook has significantly improved.

As such, we recommend an Outperform rating for Chevron shares.Zacks Investment Research