While it's impossible to predict if a company will meet, miss, or beat earnings expectations, there are always important things to look out for each earnings cycle. At the end of the month Chevron  will update investors on what December looked like, after providing an interim update on October and November operations.

Production is down across the board
The interim update painted a bleak picture for Chevron's upstream assets. U.S. liquid and natural gas production was down year over year on a daily production basis, as was international liquid and natural gas production. It's hard to grow the bottom line if upstream operations are pumping out less, which is why investors need to pay attention to how Chevron plans to change this.

Chevron has plenty of excuses as to why there was a slight decline, such as downtime in Gulf of Mexico and Angola operations and maintenance issues in Australia, but that's not good enough. Investors don't need excuses, they need results. This is why you should train your focus toward the numerous projects about to come online.


Offshore
The Papa-Terra project in offshore Brazil recently started up, and has the ability to produce 140,000 barrels of crude a day. As Chevron's partner Petrobras ramps up output to full capacity, Chevron can reap the spoils.

Across the ocean in Angola, Chevron has the Mafumeira Sul project coming online in 2015. Mafumeira Sul will produce 110,000 barrels of crude and 10,000 barrels of liquefied petroleum gas a day.

Chevron is also banking on two major projects coming online in the Gulf of Mexico by the fourth quarter of 2014. The Jack St. Malo and Big Foot will produce a combined ~230,000 barrels of oil a day. The Gulf is a major part of Chevron's growth strategy, with tens of billions at stake.

Offshore drilling is an expensive risk to take, but when it's all said and done the rewards are worth it. Decades of production and access to billions of barrels of recoverable crude truly allow companies like Chevron to put cash to work. 

Keep in mind that if these projects take longer than expected to come online, Chevron could take a big hit. Not only will costs increase, but Chevron will be missing out on plenty of revenue, which could shake investor confidence.

Numbers
Over the past eight quarters, Chevron has missed estimates five times. Speculators could easily get burned if Chevron misses again, which is why you have to keep a long-term mind-set. Trying to turn a quick profit trading Chevron's earnings could cause you to needlessly waste time and money. If you want to invest in Chevron you should be willing to wait at least until its 2017 growth plans are completed.

Downstream
Chevron's refining operations in the United States saw higher levels of output, which management partly attributed to the absence of planned maintenance at a California refinery. Even so, Chevron was still processing more crude on a daily basis than it had been in the past four quarters. Year over year, Chevron was processing ~150,000 more barrels a day at its American refineries. On the international front, Chevron was processing 40,000 fewer barrels a day year over year.

In order to find growth, Chevron is focusing on all aspects of its business, which is why it has invested heavily in its Angola LNG operations. Coming in at roughly $10 billion, the Angola LNG is finally up and running after 18 months of delays. The facility has the capacity to process 5.2 million metric tons of LNG a year, which is cooled to minus 256 degrees Fahrenheit then shipped to Brazil.

After the first few shipments, Chevron shut the plant down temporarily. This earnings call, pay attention to what Chevron says about the plant and if it will resume operations as planned or have to be delayed further.

Foolish conclusion
History points toward Chevron being unlikely to surprise to the upside this quarter, which is why investors who are interested in the stock need to be willing to hold onto it for at least a year. It takes a long time for these multi-billion dollar projects to come to fruition, but once they do it should be well worth the wait. Without upstream growth, Chevron is going to find it hard to generate value for shareholders, which is why it's imperative that the offshore projects go off without a hitch.

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The article Earnings Preview: Chevron originally appeared on Fool.com.

Callum Turcan has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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