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Occidental (OXY) Up 0.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Occidental Petroleum (OXY - Free Report) . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Occidental due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Occidental Q2 Earnings and Revenues Miss Estimates
Occidental Petroleum Corporation reported second-quarter 2023 earnings of 68 cents per share, which missed the Zacks Consensus Estimate of 70 cents by 2.86%. In the year-ago quarter, the company recorded earnings of $3.16 per share.
GAAP earnings in the quarter were 63 cents per share compared with $3.47 in the prior-year period.
Total Revenues
Occidental's total revenues came in at $6,731 million, which missed the Zacks Consensus Estimate of $6,795 million by 0.9%. The top line also declined by 37.3% from the year-ago quarter’s figure of $10,735 million.
Despite strong production volumes, the company’s performance was adversely impacted by the softness in commodity prices compared with the previous year’s quarter.
Segmental Details
Oil and Gas revenues totaled $4,941 million for the reported quarter, down 35.8% year over year. Chemical revenues amounted to $1,375 million, down 27.9% from that reported in the year-ago quarter. Midstream & Marketing revenues came in at $616 million, down 58.2% year over year.
Production & Sales
Occidental’s total production volume was 1,218 thousand barrels of oil equivalent per day (Mboe/d), higher than the company’s guidance of 1,156-1,196 Mboe/d. Such an outperformance can be attributed to higher volumes from the Permian segments. Permian’s production for the second quarter totaled 582 Mboe/d, exceeding the guided range of 558-578 Mboe/d.
Total sales volume came in at 1,222 Mboe/d, up 6.3% from 1,150 Mboe/d in the year-ago period. The improvement was due to an increase in U.S. sales volume. Out of the total sales volume, 990 Mboe/d came from domestic sales, which was up 7.7% year-over-year.
Realized Prices
Realized prices of crude oil decreased by 26.2% year over year to $73.91 per barrel on a worldwide basis. Realized natural gas liquids prices fell 47% from the prior-year quarter’s level to $21.67 per barrel globally.
Natural gas prices declined 58.1% from the year-ago quarter’s number to $5.2 per thousand cubic feet worldwide.
Highlights of the Release
Occidental’s total expenses for the reported quarter were $5,589 million, down 8% from $6,077 million in the year-ago period. The company generated $1 billion in free cash flow during the second quarter.
Interest expenses increased 101.8% to $230 million from $114 million in the year-ago quarter. Occidental repurchased shares worth $425 million, which represents 40% of its $3 billion share repurchase program.
Financial Position
As of Jun 30, 2023, Occidental had cash and cash equivalents of $486 million compared with $984 million as of Dec 31, 2022.
As of Jun 30, 2023, the company had long-term debt (net of current portion) of $19,669 million compared with $19,670 million as of Dec 31, 2022. The decrease in the company’s debt level was due to its effective debt management since the acquisition of Anadarko.
Cash flow from operations amounted to $5,940 million in the first six months of 2023 compared with $8,568 million a year ago. Total capital expenditure was $3,107 million in the first six months compared with $1,830 million in the year-ago period.
Guidance
For the third quarter of 2023, OXY expects production of 1,166-1,206 Mboe/d. Output from the Permian Resources segment is projected at 568-588 Mboe/d. Our model projects third-quarter total production of 1,170.2 Mboe/d for the quarter. Exploration expenses are estimated at $150 million for the third quarter and $460 million for 2023.
For 2023, OXY anticipates production of 1,185-1,235 Mboe/d. Output from Permian Resources is projected at 571-589 Mboe/d for the entire year. Our model currently projects total production of 1,181.1 Mboe/d for 2023, marginally lower than the low end of the guidance. Occidental plans to invest $5.4-$6.2 billion through the year to further strengthen its operations.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -7.91% due to these changes.
VGM Scores
At this time, Occidental has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Occidental has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Occidental is part of the Zacks Oil and Gas - Integrated - United States industry. Over the past month, Antero Midstream Corporation (AM - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2023 more than a month ago.
Antero Midstream Corporation reported revenues of $258.29 million in the last reported quarter, representing a year-over-year change of +12.8%. EPS of $0.22 for the same period compares with $0.20 a year ago.
For the current quarter, Antero Midstream Corporation is expected to post earnings of $0.20 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -2% over the last 30 days.
Antero Midstream Corporation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Occidental (OXY) Up 0.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Occidental Petroleum (OXY - Free Report) . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Occidental due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Occidental Q2 Earnings and Revenues Miss Estimates
Occidental Petroleum Corporation reported second-quarter 2023 earnings of 68 cents per share, which missed the Zacks Consensus Estimate of 70 cents by 2.86%. In the year-ago quarter, the company recorded earnings of $3.16 per share.
GAAP earnings in the quarter were 63 cents per share compared with $3.47 in the prior-year period.
Total Revenues
Occidental's total revenues came in at $6,731 million, which missed the Zacks Consensus Estimate of $6,795 million by 0.9%. The top line also declined by 37.3% from the year-ago quarter’s figure of $10,735 million.
Despite strong production volumes, the company’s performance was adversely impacted by the softness in commodity prices compared with the previous year’s quarter.
Segmental Details
Oil and Gas revenues totaled $4,941 million for the reported quarter, down 35.8% year over year. Chemical revenues amounted to $1,375 million, down 27.9% from that reported in the year-ago quarter. Midstream & Marketing revenues came in at $616 million, down 58.2% year over year.
Production & Sales
Occidental’s total production volume was 1,218 thousand barrels of oil equivalent per day (Mboe/d), higher than the company’s guidance of 1,156-1,196 Mboe/d. Such an outperformance can be attributed to higher volumes from the Permian segments. Permian’s production for the second quarter totaled 582 Mboe/d, exceeding the guided range of 558-578 Mboe/d.
Total sales volume came in at 1,222 Mboe/d, up 6.3% from 1,150 Mboe/d in the year-ago period. The improvement was due to an increase in U.S. sales volume. Out of the total sales volume, 990 Mboe/d came from domestic sales, which was up 7.7% year-over-year.
Realized Prices
Realized prices of crude oil decreased by 26.2% year over year to $73.91 per barrel on a worldwide basis. Realized natural gas liquids prices fell 47% from the prior-year quarter’s level to $21.67 per barrel globally.
Natural gas prices declined 58.1% from the year-ago quarter’s number to $5.2 per thousand cubic feet worldwide.
Highlights of the Release
Occidental’s total expenses for the reported quarter were $5,589 million, down 8% from $6,077 million in the year-ago period. The company generated $1 billion in free cash flow during the second quarter.
Interest expenses increased 101.8% to $230 million from $114 million in the year-ago quarter. Occidental repurchased shares worth $425 million, which represents 40% of its $3 billion share repurchase program.
Financial Position
As of Jun 30, 2023, Occidental had cash and cash equivalents of $486 million compared with $984 million as of Dec 31, 2022.
As of Jun 30, 2023, the company had long-term debt (net of current portion) of $19,669 million compared with $19,670 million as of Dec 31, 2022. The decrease in the company’s debt level was due to its effective debt management since the acquisition of Anadarko.
Cash flow from operations amounted to $5,940 million in the first six months of 2023 compared with $8,568 million a year ago. Total capital expenditure was $3,107 million in the first six months compared with $1,830 million in the year-ago period.
Guidance
For the third quarter of 2023, OXY expects production of 1,166-1,206 Mboe/d. Output from the Permian Resources segment is projected at 568-588 Mboe/d. Our model projects third-quarter total production of 1,170.2 Mboe/d for the quarter. Exploration expenses are estimated at $150 million for the third quarter and $460 million for 2023.
For 2023, OXY anticipates production of 1,185-1,235 Mboe/d. Output from Permian Resources is projected at 571-589 Mboe/d for the entire year. Our model currently projects total production of 1,181.1 Mboe/d for 2023, marginally lower than the low end of the guidance. Occidental plans to invest $5.4-$6.2 billion through the year to further strengthen its operations.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -7.91% due to these changes.
VGM Scores
At this time, Occidental has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Occidental has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Occidental is part of the Zacks Oil and Gas - Integrated - United States industry. Over the past month, Antero Midstream Corporation (AM - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2023 more than a month ago.
Antero Midstream Corporation reported revenues of $258.29 million in the last reported quarter, representing a year-over-year change of +12.8%. EPS of $0.22 for the same period compares with $0.20 a year ago.
For the current quarter, Antero Midstream Corporation is expected to post earnings of $0.20 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -2% over the last 30 days.
Antero Midstream Corporation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.