What were the main drivers of Occidental Petroleum's increased profitability in the first nine months of 2003?

The significant increase in profitability was primarily driven by higher worldwide crude oil and natural gas prices, coupled with increased crude oil production volumes. The Chemical segment also contributed positively due to higher prices for its products, although this was partially offset by increased raw material costs.

How has Occidental Petroleum's financial position changed compared to the end of 2002?

Occidental Petroleum's financial position strengthened, marked by a substantial increase in cash and cash equivalents to $529 million from $146 million. Stockholders' equity also grew considerably to $7.495 billion, supported by robust retained earnings. While total assets and liabilities increased, the growth in equity suggests an improved financial footing.

What were the significant accounting changes adopted by Occidental Petroleum during this period, and what was their impact?

Occidental adopted several new accounting standards: SFAS No. 150, which reclassified mandatorily redeemable trust preferred securities as liabilities and their payments as interest expense; FIN 46, leading to the consolidation of the OxyMar VCM joint venture without a material impact on net income; and SFAS No. 143, which resulted in an after-tax charge and an increase in property, plant, and equipment. These changes were generally implemented to comply with new accounting pronouncements and did not materially affect the company's net income for the period.

What is the outlook for Occidental Petroleum's production and capital expenditures?

Occidental expects a modest increase in fourth-quarter 2003 oil and gas production, driven by new field developments like the Eden-Yuturi field. The company prudently manages capital, with approximately 90% of its expected $1.4 billion capital spending for 2003 allocated to the oil and gas segment. Occidental also plans to redeem $454 million in trust preferred securities in January 2004.

OXY/OXY-WT 10-Q Quarterly Report Q3 FY2003

Summary

Occidental Petroleum Corporation (OXY) reported strong financial performance for the nine months ending September 30, 2003. Net income rose significantly to $1.145 billion from $667 million in the same period of 2002, driven by higher crude oil and natural gas prices, and increased crude oil production. Net sales also saw a substantial increase, reaching $6.956 billion compared to $5.353 billion in the prior year's comparable period. The company's balance sheet shows a healthy increase in cash and cash equivalents to $529 million from $146 million, indicating improved liquidity. While total assets grew to $17.7 billion, liabilities also increased, primarily due to long-term debt. However, stockholders' equity saw a significant jump to $7.495 billion, bolstered by strong retained earnings. The company generated robust operating cash flow of $2.262 billion, supporting its investing activities which included substantial capital expenditures. Overall, OXY demonstrated improved profitability and a stronger financial position driven by favorable commodity prices and operational execution. Investors should note the segment performance with Oil and Gas leading profitability, while the Chemical segment also showed signs of recovery. The company also provided an updated outlook, expecting modest production increases and managing capital expenditures prudently.

Key Highlights

1Net income for the first nine months of 2003 increased to $1.145 billion, a substantial rise from $667 million in the same period of 2002.
2Net sales for the nine months ended September 30, 2003, grew to $6.956 billion, up from $5.353 billion in the prior year, primarily driven by higher oil and gas prices and volumes.
3Cash and cash equivalents significantly increased to $529 million at September 30, 2003, from $146 million at December 31, 2002, indicating improved liquidity.
4Stockholders' equity grew to $7.495 billion, reflecting strong retained earnings growth.
5Capital expenditures for the first nine months of 2003 were $1.151 billion, with a significant portion allocated to the oil and gas segment.
6The Oil and Gas segment was the primary driver of profitability, with pretax operating profit of $2.024 billion for the nine months of 2003.
7Occidental adopted new accounting standards including SFAS No. 150 (Financial Instruments) and FIN 46 (Consolidation of Variable Interest Entities), which resulted in reclassifications and consolidations but had no material impact on net income.

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2003

Summary

Key Highlights

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