We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
OXY Stock Pre-Q3 Earnings: Should You Hold or Sell the Stock?
Read MoreHide Full Article
Occidental Petroleum Corporation (OXY - Free Report) is expected to report an improvement in its top line and a decline in bottom lines when it reports third-quarter 2024 results on Nov. 12, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for OXY’s third-quarter revenues is pegged at $7.47 billion, indicating a nearly 1% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 81 cents per share. The Zacks Consensus Estimate for OXY’s third-quarter earnings has decreased by 18.2% in the past 60 days. The estimate suggests a 31.36% year-over-year decline.
Image Source: Zacks Investment Research
OXY’s Solid Earnings Surprise History
Occidental Petroleum’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20.61%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Occidental Petroleum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
Occidental Petroleum Corporation Price and EPS Surprise
Occidental Petroleum’s third-quarter production volumes are expected in the range of 1.37-1.41 million barrels of oil equivalents (BOE) per day compared to the second-quarter production of an annual low of 1.258 million BOE per day. The sequential improvement in production volume in the third quarter is likely to have been mainly due to the strong performance of its onshore assets and contribution from CrownRock L.P. assets.Strong volumes from the Permian Basin assets are likely to have boosted overall volumes in the third quarter.
Occidental Petroleum is likely to have gained from its ongoing debt reduction. The company is likely to have retired debts worth $3 billion in the to-be-reported quarter, which will strengthen its balance sheet and reduce its interest expenses, boosting earnings.
OXY’s performance is also expected to have been positively impacted by its routine flaring reduction initiatives and introduction of innovative technologies, which will further lower operating expenses.
The company's practice is to remain exposed to market prices of commodities, so the drop in commodity prices during the third quarter is expected to have adversely impacted Occidental Petroleum’s earnings despite strong production in the quarter.
OXY’s Price Performance
OXY’s shares have lost 19% in the past six months, wider than the industry’s decline of 7%.
Image Source: Zacks Investment Research
OXY Stock Trading at a Premium
Occidental Petroleum’s shares are somewhat expensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 5.33X compared with its industry average of 4.86X.
Image Source: Zacks Investment Research
Other operators in the space, like ConocoPhillips (COP - Free Report) and Cactus (WHD - Free Report) are currently trading at a premium compared with Occidental Petroleum. EV/EBITDA TTM multiple of COP and WHD are currently pegged at 5.52X and 14.38X, respectively.
Investment Thesis
Occidental Petroleum's strong domestic operation and focus on Permian resources have been beneficial for the company. Its core development area in the Permian region has been recording solid results. Contribution from acquired CrownRock assets is likely to have boosted production volumes.
The recent slide in commodity prices might have impacted the company’s performance as its practice is to remain exposed to market prices of commodities.
OXY’s times interest earned ratio currently stands at 6.7, which indicates that it has enough financial strength to meet its interest obligations. The company is also going to benefit from its ongoing debt reduction.
Summing Up
Occidental Petroleum’s third-quarter earnings are expected to have benefited from strong production volumes coming from domestic operations. The company’s cash flow generation and initiative to lower debts, and contribution from acquisition are expected to have boosted its performance.
However, its exposure to commodity price fluctuation and a competitive oil and gas industry pose challenges.
Despite the tailwinds, Occidental currently has a Zacks Rank #4. Hence, it is advisable to stay away from the stock for the time being, given its declining earnings estimates and drop in commodity prices impacting profitability.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
OXY Stock Pre-Q3 Earnings: Should You Hold or Sell the Stock?
Occidental Petroleum Corporation (OXY - Free Report) is expected to report an improvement in its top line and a decline in bottom lines when it reports third-quarter 2024 results on Nov. 12, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for OXY’s third-quarter revenues is pegged at $7.47 billion, indicating a nearly 1% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 81 cents per share. The Zacks Consensus Estimate for OXY’s third-quarter earnings has decreased by 18.2% in the past 60 days. The estimate suggests a 31.36% year-over-year decline.
Image Source: Zacks Investment Research
OXY’s Solid Earnings Surprise History
Occidental Petroleum’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20.61%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Occidental Petroleum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
Occidental Petroleum Corporation Price and EPS Surprise
Occidental Petroleum Corporation price-eps-surprise | Occidental Petroleum Corporation Quote
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of -12.90%.
Zacks Rank: Occidental Petroleum currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped OXY’s Q3 Earnings
Occidental Petroleum’s third-quarter production volumes are expected in the range of 1.37-1.41 million barrels of oil equivalents (BOE) per day compared to the second-quarter production of an annual low of 1.258 million BOE per day. The sequential improvement in production volume in the third quarter is likely to have been mainly due to the strong performance of its onshore assets and contribution from CrownRock L.P. assets.Strong volumes from the Permian Basin assets are likely to have boosted overall volumes in the third quarter.
Occidental Petroleum is likely to have gained from its ongoing debt reduction. The company is likely to have retired debts worth $3 billion in the to-be-reported quarter, which will strengthen its balance sheet and reduce its interest expenses, boosting earnings.
OXY’s performance is also expected to have been positively impacted by its routine flaring reduction initiatives and introduction of innovative technologies, which will further lower operating expenses.
The company's practice is to remain exposed to market prices of commodities, so the drop in commodity prices during the third quarter is expected to have adversely impacted Occidental Petroleum’s earnings despite strong production in the quarter.
OXY’s Price Performance
OXY’s shares have lost 19% in the past six months, wider than the industry’s decline of 7%.
Image Source: Zacks Investment Research
OXY Stock Trading at a Premium
Occidental Petroleum’s shares are somewhat expensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 5.33X compared with its industry average of 4.86X.
Image Source: Zacks Investment Research
Other operators in the space, like ConocoPhillips (COP - Free Report) and Cactus (WHD - Free Report) are currently trading at a premium compared with Occidental Petroleum. EV/EBITDA TTM multiple of COP and WHD are currently pegged at 5.52X and 14.38X, respectively.
Investment Thesis
Occidental Petroleum's strong domestic operation and focus on Permian resources have been beneficial for the company. Its core development area in the Permian region has been recording solid results. Contribution from acquired CrownRock assets is likely to have boosted production volumes.
The recent slide in commodity prices might have impacted the company’s performance as its practice is to remain exposed to market prices of commodities.
OXY’s times interest earned ratio currently stands at 6.7, which indicates that it has enough financial strength to meet its interest obligations. The company is also going to benefit from its ongoing debt reduction.
Summing Up
Occidental Petroleum’s third-quarter earnings are expected to have benefited from strong production volumes coming from domestic operations. The company’s cash flow generation and initiative to lower debts, and contribution from acquisition are expected to have boosted its performance.
However, its exposure to commodity price fluctuation and a competitive oil and gas industry pose challenges.
Despite the tailwinds, Occidental currently has a Zacks Rank #4. Hence, it is advisable to stay away from the stock for the time being, given its declining earnings estimates and drop in commodity prices impacting profitability.