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Occidental (OXY) Q3 Earnings Lag, Revenues Beat Estimates

Occidental Petroleum Corporation OXY reported third-quarter 2022 earnings of $2.44 per share, lagging the Zacks Consensus Estimate of $2.48 by 1.6%. Earnings in the third quarter were lower than our estimate of $2.83 per share. In the year-ago quarter, the company reported earnings of 87 cents. Earnings improved year over year due to an increase in operating efficiencies and commodity prices.

GAAP earnings of Occidental in third-quarter 2022 were $2.52 per share compared with 65 cents in the year-ago quarter.

Total Revenues

Occidental's total revenues were $9,501 million, which surpassed the Zacks Consensus Estimate of $9,354 million by 1.6%. The top line also improved 39.4% from the year-ago quarter. The year-over-year improvement was due to a rise in contribution from all its segments. Total revenues were higher than our estimate of $9,402.1 million.

Occidental Petroleum Corporation Price, Consensus and EPS Surprise

Occidental Petroleum Corporation Price, Consensus and EPS Surprise
Occidental Petroleum Corporation Price, Consensus and EPS Surprise

Occidental Petroleum Corporation price-consensus-eps-surprise-chart | Occidental Petroleum Corporation Quote

Segmental Details

Oil and Gas revenues for the quarter were $7,098 million, up 43.3% year over year.

Chemical revenues for the quarter were $1,691 million, up 21.1% year over year.

Midstream & Marketing revenues for the quarter were $1,005 million, up 43.2% year over year.

Production & Sales

Occidental’s total production volume for the third quarter was 1,180 thousand barrels of oil equivalent per day (Mboe/d), which was above the company’s guidance of 1,140-1,170 Mboe/d. Strong production volumes were attributed to higher volumes from the Rockies and other domestic assets. Permian Resources’ production for the third quarter was with 523 Mboe/d, which was near the lower end of the guidance of 523-533 Mboe/d.

For the quarter under review, total sales volume was 1,179 Mboe/d, up 1.8% from 1,158 Mboe/d recorded in the year-ago period. The improvement was due to an increase in U.S. sales volume.

Realized Prices

Third-quarter realized prices of crude oil improved 38% year over year to $94.89 per barrel on a worldwide basis. Realized natural gas liquids’ prices also improved 3.6% from the prior-year quarter to $35.22 per barrel worldwide.

Natural gas prices increased 92.7% from the year-ago quarter to $5.57 per thousand cubic feet worldwide. The company benefited from a worldwide improvement in commodity prices.

Highlights of the Release

Occidental’s total expenses for the reported quarter were $6,119 million, up 6.7% year over year.

The company generated $3.6 billion in free cash flow in the third quarter and repaid debts of $1.3 billion during the third quarter, with year-to-date repayments of $9.6 billion through Nov 7, 2022, further strengthening the balance sheet.

Interest expenses for the reported quarter were down 36.5% to $285 million from $449 million in the year-ago period.

Occidental repurchased more than 41.8 million shares for $2.6 billion through Nov 7, 2022.

Financial Position

As of Sep 30, 2022, Occidental had cash and cash equivalents of $1,233 million compared with $2,764 million as of Dec 31, 2021.

As of Sep 30, 2022, the company had long-term debt (net of current portion) of $20,478 million compared with $29,431 million as of Dec 31, 2021. The decrease in the debt level was due to the effective management of debt since the acquisition of Anadarko.

For third-quarter 2022, cash flow from operations was $4,700 million, up from $2,967 million in the prior-year period.

Occidental’s total capital expenditure for third-quarter 2022 was $1,147 million compared with $656 million invested in the year-ago period.

Guidance

For the fourth quarter of 2022, OXY expects production of 1,200-1,260 Mboe/d and output from Permian Resources of 556-590 Mboe/d. Occidental expects fourth-quarter exploration expenses of $115 million.

OXY aims to repurchase shares worth $3 billion in 2022, which will further improve shareholders value.

Occidental has plans to invest $3.9-$4.3 billion in 2022 to further strengthen its operation.

Zacks Rank

Currently, Occidental has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Devon Energy Corp. DVN reported third-quarter 2022 adjusted earnings of $2.18 per share, beating the Zacks Consensus Estimate of $2.13 by 2.4%.

The Zacks Consensus Estimate for DVN’s 2022 earnings implies year-over-year growth of 150.7%. Devon Energy witnessed an average surprise of 8.5% in the last four reported quarters.

CNX Resources Corporation CNX reported third-quarter 2022 adjusted loss of 54 cents per share, which missed the Zacks Consensus Estimate earnings of 72 cents by 175%.

CNX Resources’ long-term (three to five years) earnings growth is currently pegged at 26.1%. The Zacks Consensus Estimate for CNX’s 2022 earnings implies year-over-year growth of 23.6%.

TotalEnergies SE TTE has reported third-quarter 2022 operating earnings of $3.83 (€3.78) per share, lagging the Zacks Consensus Estimate of $3.91 per share by 2.04%.

The Zacks Consensus Estimate for TTE’s 2022 earnings implies year-over-year growth of 117.6%. TotalEnergies posted an average surprise of 10.9% in the last four reported quarters.


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