Occidental Profit Unchanged as Higher Output Offsets Lower Price
Occidental Petroleum Corp. (OXY), the largest onshore crude producer in the continental U.S., said second-quarter profit was unchanged as surging output in Texas and California helped offset falling oil prices abroad.
Net income of $1.32 billion, or $1.64 a share, compared with earnings of $1.33 billion, or $1.64, a year earlier, Los Angeles-based Occidental said in a statement on Business Wire today. Per-share profit excluding one-time items missed the $1.60 average of 23 analysts’ estimates compiled by Bloomberg.
Chief Executive Officer Stephen I. Chazen, who gained more autonomy at the company after shareholders voted to oust longtime Chairman Ray Irani in May, said April 25 he is exploring a breakup that would “move the needle” of the company’s shares.
Possibilities include splitting into as many as three companies, separating units in Texas, California and the Middle East and North Africa, according to comments Chazen made in May meetings with analysts including Oppenheimer & Co.’s Fadel Gheit and Bank of America Corp.’s Doug Leggate.
“The key to Occidental is not earnings but restructuring and showing what steps they have taken so far,” Gheit said in a telephone interview before earnings were released. Gheit, based in New York, rates the company the equivalent of a buy and doesn’t own the shares.
Brent crude, the global benchmark, fell 5 percent to $103.35 a barrel, and the average price of natural gas futures traded in New York rose 71 percent from the year-earlier quarter to $4.018 per million British thermal units.
Earnings were announced before regular trading began in U.S. markets. Occidental fell 0.3 percent to $90.48 yesterday in New York. The shares, which have 19 buy ratings and nine holds from analysts, have risen 18 percent this year.
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