Summary
Occidental Petroleum Corporation (OXY) reported a significant increase in profitability for the first quarter of 2001 compared to the same period in 2000. Net income rose to $484 million from $271 million, with basic earnings per share increasing to $1.31 from $0.74. This strong performance was primarily driven by the Oil and Gas segment, benefiting from higher domestic natural gas prices and increased oil production from recent acquisitions, notably Altura Energy Ltd. The company also saw a notable increase in net sales, reaching $4.5 billion from $2.6 billion. While the Oil and Gas segment showed robust growth, the Chemical segment experienced a loss of $79 million, a reversal from a $143 million profit in the prior year, largely due to higher energy and feedstock costs, and lower sales prices and volumes for key products. Occidental's financial condition remains solid, with sufficient cash from operations to cover expected expenditures and a commitment to reduce total debt by $1.0 billion by year-end 2001. The company also adopted new accounting standards for derivative instruments (SFAS No. 133) at the beginning of the year, which resulted in an initial after-tax reduction in net income.
Key Highlights
- 1Net income more than doubled to $484 million in Q1 2001 from $271 million in Q1 2000, with EPS rising to $1.31 from $0.74.
- 2Net sales surged to $4.5 billion from $2.6 billion year-over-year, largely due to improved pricing and production in the Oil and Gas segment.
- 3The Oil and Gas segment reported strong earnings of $946 million, benefiting from higher domestic natural gas prices and increased production from recent acquisitions.
- 4The Chemical segment swung to a net loss of $79 million from a profit of $143 million, impacted by rising costs and lower product prices.
- 5Occidental expects to generate sufficient cash flow to fund operations, capital expenditures, and debt repayments, with plans to reduce total debt by $1.0 billion in 2001.
- 6The company adopted SFAS No. 133 for derivative instruments, resulting in an initial reduction in net income and other comprehensive income.
- 7Significant capital expenditures are planned, with an expected $1.1 billion in capital spending for 2001.