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Occidental Petroleum Q3 Earnings Beat Estimates on Strong Oil Prices
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Key Takeaways
Occidental's Q3 adjusted EPS surged 274.5% to $1.91, beating estimates by 33.57%, as revenues rose 20.6%.
OXY's realized crude oil prices rose 32.6% to $85.91 per barrel, offsetting a 2.6% decline in production.
Occidental generated $2.78 billion in free cash flow and repaid $1.8 billion in debt during the quarter.
Occidental Petroleum Corporation (OXY - Free Report) reported third-quarter 2026 adjusted earnings of $1.91 per share, surging 274.5% year over year from 51 cents and beating the Zacks Consensus Estimate of $1.43 by 33.57%. Higher realized crude oil prices and strong adjusted Midstream and Marketing performance supported results.
Reported earnings were $1.61 per share compared with 65 cents a year earlier.
OXY's shares have gained 2.7% in the two trading sessions after earnings release, driven by positive investor sentiment following its strong third-quarter earnings results.
Total Revenues
Total revenues climbed 20.6% to $6.77 billion from $5.61 billion in the year-ago quarter.
Oil and Gas revenues totaled $6.44 billion, increasing 19.1% from $5.40 billion in the year-ago quarter. Higher commodity realizations supported revenues despite lower production volumes.
Midstream and Marketing revenues declined 1.1% year over year to $262 million from $265 million. Interest, dividends and other income increased to $171 million from $60 million a year earlier. Gains on asset sales and other items remained unchanged at $34 million.
Occidental Petroleum Corporation Price, Consensus and EPS Surprise
Worldwide production averaged 1,427 thousand barrels of oil equivalent per day (Mboe/d), exceeding the midpoint of management's guidance but declined 2.6% year over year from 1,465 Mboe/d. Domestic production averaged 1,203 Mboe/d compared with 1,227 Mboe/d in the prior-year quarter.
Permian Resources production increased to 812 Mboe/d from 800 Mboe/d a year earlier. Rockies and Other Domestic production declined to 281 Mboe/d from 288 Mboe/d. Gulf of America output decreased to 110 Mboe/d from 139 Mboe/d, reflecting a third-party gas pipeline constraint and extended maintenance activities. Management indicated that full production was restored in late October.
International production declined to 224 Mboe/d from 238 Mboe/d a year earlier. Despite these challenges, strong Permian and Rockies performance helped overall production exceed guidance.
OXY Benefits From Higher Commodity Realizations
Occidental's worldwide realized crude oil price increased 32.6% year over year to $85.91 per barrel from $64.78. The average WTI and Brent marker prices were $85.79 and $91.62 per barrel, respectively, compared with $64.93 and $68.14 a year earlier.
Worldwide realized natural gas liquids prices advanced 25.7% to $24.63 per barrel from $19.60. Domestic realized natural gas prices improved to $1.61 per thousand cubic feet from $1.48 in the year-ago quarter.
Sequentially, worldwide realized crude oil prices declined 11.2% from $96.78 per barrel, weighing on Oil and Gas profitability. Higher domestic natural gas realizations partially offset this pressure.
Occidental's Operating Costs Decline Y/Y
Total costs and other deductions decreased 5.5% year over year to $4.51 billion. Oil and gas lease operating expenses increased 1.5% to $1.19 billion, while transportation and gathering expenses declined 6.5% to $445 million.
Depreciation, depletion and amortization expenses decreased 8.4% to $1.78 billion. Interest and debt expense dropped 70.7% to $78 million, reflecting the company's accelerated debt-reduction efforts.
Oil and Gas reported adjusted pre-tax income of $2.67 billion compared with $1.32 billion in the year-ago quarter. Midstream and Marketing adjusted pre-tax income increased to $309 million from $51 million, exceeding the upper end of management's guidance.
OXY's Cash Flow Supports Further Debt Reduction
During the third quarter, operating cash flow from continuing operations totaled $4.13 billion. Excluding working-capital movements, operating cash flow reached $4.10 billion. Capital expenditures, net of noncontrolling interest, were $1.32 billion, resulting in free cash flow before working capital of $2.78 billion.
Occidental reduced principal debt by $1.8 billion during the quarter, reaching its $10 billion milestone. Year-to-date debt repayments totaled $10.4 billion, generating approximately $740 million in annualized interest savings compared with 2025.
The company ended September with $3.88 billion in cash and cash equivalents. Management established a new principal debt target of $6 billion and continues to prioritize balance-sheet strengthening.
Occidental Provides Q4 Outlook
For the fourth quarter of 2026, Occidental expects worldwide production of 1,430-1,470 Mboe/d. Permian production is projected at 820-840 Mboe/d, while Rockies and Other Domestic output is anticipated at 271-277 Mboe/d.
Gulf of America production is expected between 112 Mboe/d and 120 Mboe/d. International production is expected to be 227-233 Mboe/d.
Management expects fourth-quarter Midstream and Marketing pre-tax income of $100-$200 million. Net capital expenditures are projected at approximately $1.3 billion, with adjusted interest expense of nearly $130 million.
The company is targeting more than $4 billion in incremental annual sustainable cash flow by 2030 through operating efficiencies, lower sustaining capital requirements and reduced financing costs.
Murphy Oil Corporation (MUR - Free Report) reported third-quarter 2026 adjusted earnings of $1.08 per share, up 163.4% from 41 cents in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of 91 cents per share by 18.68%. Stronger commodity prices and lower operating costs supported the results.
Total revenues of $855 million increased 16.6% year over year and beat the consensus estimate of $767 million by 11.52%.
TotalEnergies SE (TTE - Free Report) reported third-quarter 2026 operating earnings of $4.03 (€3.50) per share, which lagged the Zacks Consensus Estimate of $4.11 by 1.95%. The bottom line improved 127.7% from the year-ago figure of $1.77 (€1.50).
Total revenues were $66.82 billion, up 37.2% year over year, surpassing the Zacks Consensus Estimate of $53.72 billion by 24.39%. Strong refining margins and higher gas prices supported results.
CNX Resources Corporation (CNX - Free Report) reported third-quarter 2026 operating earnings of 61 cents per share, missing the Zacks Consensus Estimate of 65 cents by 6.2%. Lower natural gas prices and production volumes weighed on quarterly performance despite improved cost efficiency and continued free cash flow generation.
CNX reported revenues of $373 million, missing the Zacks Consensus Estimate of $400 million by 6.8%. Revenues declined 7.1% from $401 million in the year-ago quarter.
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Occidental Petroleum Q3 Earnings Beat Estimates on Strong Oil Prices
Key Takeaways
Occidental Petroleum Corporation (OXY - Free Report) reported third-quarter 2026 adjusted earnings of $1.91 per share, surging 274.5% year over year from 51 cents and beating the Zacks Consensus Estimate of $1.43 by 33.57%. Higher realized crude oil prices and strong adjusted Midstream and Marketing performance supported results.
Reported earnings were $1.61 per share compared with 65 cents a year earlier.
OXY's shares have gained 2.7% in the two trading sessions after earnings release, driven by positive investor sentiment following its strong third-quarter earnings results.
Total Revenues
Total revenues climbed 20.6% to $6.77 billion from $5.61 billion in the year-ago quarter.
Oil and Gas revenues totaled $6.44 billion, increasing 19.1% from $5.40 billion in the year-ago quarter. Higher commodity realizations supported revenues despite lower production volumes.
Midstream and Marketing revenues declined 1.1% year over year to $262 million from $265 million. Interest, dividends and other income increased to $171 million from $60 million a year earlier. Gains on asset sales and other items remained unchanged at $34 million.
Occidental Petroleum Corporation Price, Consensus and EPS Surprise
Occidental Petroleum Corporation price-consensus-eps-surprise-chart | Occidental Petroleum Corporation Quote
Occidental's Production Exceeds Guidance Midpoint
Worldwide production averaged 1,427 thousand barrels of oil equivalent per day (Mboe/d), exceeding the midpoint of management's guidance but declined 2.6% year over year from 1,465 Mboe/d. Domestic production averaged 1,203 Mboe/d compared with 1,227 Mboe/d in the prior-year quarter.
Permian Resources production increased to 812 Mboe/d from 800 Mboe/d a year earlier. Rockies and Other Domestic production declined to 281 Mboe/d from 288 Mboe/d. Gulf of America output decreased to 110 Mboe/d from 139 Mboe/d, reflecting a third-party gas pipeline constraint and extended maintenance activities. Management indicated that full production was restored in late October.
International production declined to 224 Mboe/d from 238 Mboe/d a year earlier. Despite these challenges, strong Permian and Rockies performance helped overall production exceed guidance.
OXY Benefits From Higher Commodity Realizations
Occidental's worldwide realized crude oil price increased 32.6% year over year to $85.91 per barrel from $64.78. The average WTI and Brent marker prices were $85.79 and $91.62 per barrel, respectively, compared with $64.93 and $68.14 a year earlier.
Worldwide realized natural gas liquids prices advanced 25.7% to $24.63 per barrel from $19.60. Domestic realized natural gas prices improved to $1.61 per thousand cubic feet from $1.48 in the year-ago quarter.
Sequentially, worldwide realized crude oil prices declined 11.2% from $96.78 per barrel, weighing on Oil and Gas profitability. Higher domestic natural gas realizations partially offset this pressure.
Occidental's Operating Costs Decline Y/Y
Total costs and other deductions decreased 5.5% year over year to $4.51 billion. Oil and gas lease operating expenses increased 1.5% to $1.19 billion, while transportation and gathering expenses declined 6.5% to $445 million.
Depreciation, depletion and amortization expenses decreased 8.4% to $1.78 billion. Interest and debt expense dropped 70.7% to $78 million, reflecting the company's accelerated debt-reduction efforts.
Oil and Gas reported adjusted pre-tax income of $2.67 billion compared with $1.32 billion in the year-ago quarter. Midstream and Marketing adjusted pre-tax income increased to $309 million from $51 million, exceeding the upper end of management's guidance.
OXY's Cash Flow Supports Further Debt Reduction
During the third quarter, operating cash flow from continuing operations totaled $4.13 billion. Excluding working-capital movements, operating cash flow reached $4.10 billion. Capital expenditures, net of noncontrolling interest, were $1.32 billion, resulting in free cash flow before working capital of $2.78 billion.
Occidental reduced principal debt by $1.8 billion during the quarter, reaching its $10 billion milestone. Year-to-date debt repayments totaled $10.4 billion, generating approximately $740 million in annualized interest savings compared with 2025.
The company ended September with $3.88 billion in cash and cash equivalents. Management established a new principal debt target of $6 billion and continues to prioritize balance-sheet strengthening.
Occidental Provides Q4 Outlook
For the fourth quarter of 2026, Occidental expects worldwide production of 1,430-1,470 Mboe/d. Permian production is projected at 820-840 Mboe/d, while Rockies and Other Domestic output is anticipated at 271-277 Mboe/d.
Gulf of America production is expected between 112 Mboe/d and 120 Mboe/d. International production is expected to be 227-233 Mboe/d.
Management expects fourth-quarter Midstream and Marketing pre-tax income of $100-$200 million. Net capital expenditures are projected at approximately $1.3 billion, with adjusted interest expense of nearly $130 million.
The company is targeting more than $4 billion in incremental annual sustainable cash flow by 2030 through operating efficiencies, lower sustaining capital requirements and reduced financing costs.
Zacks Rank of OXY
Occidental currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases
Murphy Oil Corporation (MUR - Free Report) reported third-quarter 2026 adjusted earnings of $1.08 per share, up 163.4% from 41 cents in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of 91 cents per share by 18.68%. Stronger commodity prices and lower operating costs supported the results.
Total revenues of $855 million increased 16.6% year over year and beat the consensus estimate of $767 million by 11.52%.
TotalEnergies SE (TTE - Free Report) reported third-quarter 2026 operating earnings of $4.03 (€3.50) per share, which lagged the Zacks Consensus Estimate of $4.11 by 1.95%. The bottom line improved 127.7% from the year-ago figure of $1.77 (€1.50).
Total revenues were $66.82 billion, up 37.2% year over year, surpassing the Zacks Consensus Estimate of $53.72 billion by 24.39%. Strong refining margins and higher gas prices supported results.
CNX Resources Corporation (CNX - Free Report) reported third-quarter 2026 operating earnings of 61 cents per share, missing the Zacks Consensus Estimate of 65 cents by 6.2%. Lower natural gas prices and production volumes weighed on quarterly performance despite improved cost efficiency and continued free cash flow generation.
CNX reported revenues of $373 million, missing the Zacks Consensus Estimate of $400 million by 6.8%. Revenues declined 7.1% from $401 million in the year-ago quarter.