Occidental Petroleum Earnings: Here’s Why Investors Boosted the Stock

Occidental Petroleum Corporation (NYSE:OXY) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 3.46%.

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Occidental Petroleum Corporation Earnings Cheat Sheet

Results: Net income decreased -79.44% to $336 million (42 cents per diluted share) in the quarter versus a net gain of $1.63 billion in the year-earlier quarter.

Revenue: Rose 1.88% to $6.17 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Occidental Petroleum Corporation reported adjusted net income of 42 cents per share. By that measure, the company missed the mean analyst estimate of $1.66. It beat the average revenue estimate of $5.85 billion.

Quoting Management:

In announcing the results, Stephen I. Chazen, President and Chief Executive Officer, said, “Our fourth quarter domestic production of 475,000 barrels of oil equivalent per day, of which 342,000 barrels per day was liquids, set a record for the ninth consecutive quarter. Our total company production for all of 2012 was 766,000 barrels of oil equivalent per day, which was 5 percent higher than 2011. Our domestic oil production grew by 11 percent for all of 2012 to 255,000 barrels per day from 230,000 barrels in 2011…

…Fourth quarter core income was $1.5 billion or $1.83 per diluted share. These results were $0.13 higher than the third quarter of 2012 as a result of higher liquids volumes, higher realized NGL and domestic gas prices and lower operating expenses. In the fourth quarter, our production costs were $1.04 a barrel lower than the third quarter, with improvements across most units. The reductions resulted from efficiencies achieved across most cost categories including savings in surface operations, reductions in the use of outside contractors, curtailment of uneconomic down-hole maintenance and workover activity, as well as related overhead. Our exit rate on a per barrel basis was well below the total year 2012 and below the fourth quarter 2011 levels. We generated cash flow from continuing operations before working capital changes of $12.1 billion for the twelve months of 2012 and invested $10.2 billion in capital expenditures.”

Key Stats:

Revenue increased 2.99% from $5.99 billion in the previous quarter. Net income decreased 75.56% from $1.38 billion in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.82 to a profit $1.79. For the current year, the average estimate has moved down from a profit of $7.02 to a profit of $6.93 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)