Why is Occidental (OXY) down 6% since its last earnings report?

It’s been about a month since Occidental Petroleum’s (OXY) last earnings report. Shares have lost about 6% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Occidental waiting for a breakout? 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 better understand the important catalysts.

Occidental Petroleum’s first-quarter earnings beat, revenue estimates lag

Occidental Petroleum Corporation reported first-quarter 2024 earnings of 65 cents per share, missing the Zacks Consensus Estimate of 56 cents by 16.1%. In the last year’s quarter, the company reported a profit of $1.09.

GAAP earnings were 75 cents, compared with $1 in the prior-year quarter.

Total revenues

Total revenues came in at $6.01 billion, missing the Zacks Consensus Estimate of $6.66 billion by 9.8%. On an annual basis, sales revenues decreased by 17.2%.

Segment details

Oil and gas Revenue for the quarter was $4.9 billion, down 7.7% year-over-year.

Chemical revenue was $1.18 billion, down 15.6% year-over-year.

The mainstream and marketing revenue of $99 million was down 86.8% year-over-year.

Production and sales

The total mining volume amounted to 1,172 thousand. barrels of oil equivalent per day (Mboe/d). The rate was within the company’s estimate of 1,155-1,195 Mboe/d. Production volumes in the Rocky Mountains and other domestic countries are above estimates, while average daily production volumes in the Permian and worldwide are within projected limits.

Total sales volume was 1,175 Mboe/d, down 3.2% compared to the year-ago period.

Realized prices

Realized crude oil prices increased 2.4% year-over-year to $76.04 per barrel on a global basis. Realized natural gas liquids prices fell 9.3% year-over-year to $22.14 per barrel globally.

Natural gas prices fell 39.1% year over year to $1.68 per thousand cubic feet.

Release highlights

Occidental Petroleum benefited from new drilling and the use of new technologies that increased capital efficiency. New wells expected to come on stream in the Permian and rocky regions will increase production volumes.

In the first quarter of 2024, the company generated operating cash flow of $2.2 billion.

Interest and debt expense increased 19.3% to $284 million from $238 million in the year-ago quarter.

Financial position

As of March 31, 2024, Occidental Petroleum had cash and cash equivalents of $1.3 billion, compared to $1.4 billion as of December 31, 2023.

As of March 31, 2024, the company had long-term debt (net of current debt) of USD 18.5 billion compared to USD 18.5 billion as of December 31, 2023.

Cash flow from operations was $2 billion, compared to $2.87 billion in the year-ago period.

Total capital expenditure was $1.78 billion, compared with $1.46 billion in the year-ago period.

Conductivity

In the second quarter of 2024, OXY expects production of 1,232-1,272 Mboe/d. Production from the Permian resource segment is forecast to be 574–592 Mboe/d. Occidental Petroleum maintained production volumes for 2024 in the range of 1,220-1,280 Mboe/d, with the expected share of Permian resources in the range of 569-599 Mboe/d.

Exploration costs are estimated at $100 million in the second quarter and $325 million in 2024.

How have estimates changed since then?

It turns out, revision estimates have flattened over the past month.

VGM results

Right now, Occidental has a Weak Growth Score of D, a rating with the same Momentum Score. However, the stock is rated B for value, putting it in the second quintile for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Occidental carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Occidental is part of the Zacks Oil and Gas – Integrated – United States industry. Over the past month, Antero Midstream Corporation (AM) in the same industry has gained 2%. More than a month ago, the company published its results for the quarter ended March 2024.

Antero Midstream reported revenue of $279.05 million in the most recent quarter, representing a +7.5% year-over-year change. EPS of $0.24 for the same period compared to $0.21 a year ago.

Antero Midstream is expected to report earnings per share of $0.23 for the current quarter, which would represent a year-over-year change of +4.6%. The Zacks Consensus Estimate has remained unchanged over the past 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Antero Midstream. The stock also has a VGM Rating of C.

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