Occidental Petroleum quarterly earnings down 48%, miss estimates

HOUSTON: US oil and gas producer Occidental Petroleum Corp on Tuesday (May 9) reported a 48% decline in first-quarter earnings that fell well short of analyst estimates as global economic growth concerns led to a decline in oil prices.

Global energy prices in the quarter pulled back from last year’s peaks triggered by Russia’s invasion of Ukraine. Occidental’s crude oil sold for 19% less than the year-ago quarter, averaging US$74.22 per barrel.

Earnings declined despite a boost in first quarter oil and gas daily output to 1.22 million barrels from 1.08 million a year earlier, helped by higher production from its Permian operations.

The company, in which billionaire investor Warren Buffett’s Berkshire Hathaway Inc owns a 24% stake, reported adjusted income dropped 48% from the prior year to US$1.1 billion (RM4.88 billion)as it accelerated investments and shareholder returns.

Adjusted earnings of US$1.09 per share for the quarter fell far short of analysts’ US$1.24 per share estimate compiled by Refinitiv.

Occidental almost doubled capital spending in the quarter from a year earlier to US$1.5 billion, and cash flow from operations before working capital fell 24% to US$3.2 billion.

Occidental increased its year-end production guidance by 20,000 barrels of oil and gas to 1.22 million barrels per day.

The company repurchased US$752 million of common stock, accounting for over 25% of its US$3 billion annual repurchase program and triggered the redemption of US$647 million of preferred stock.

Brent crude averaged US$82 a barrel in the quarter, about 20% lower than year-ago levels as concerns rose over the health of the global economy amid the recent banking crisis in the US and China’s weaker-than-estimated economic recovery.

Average domestic realised gas prices decreased by approximately 32% from the prior quarter to US$3.01 per million cubic feet.

Buffett said on Saturday that Berkshire Hathaway was not planning to acquire Occidental but remained happy with its large investment in the oil company. – Reuters