Summary
Occidental Petroleum Corporation's (OXY) third quarter and nine-month report for the period ending September 30, 2013, demonstrates a company with robust operational performance and a solid financial position. Net income for the nine months was steady at $4.3 billion compared to the prior year, with a slight increase in diluted EPS to $5.28. The company saw improved net sales driven by higher domestic realized prices for oil and natural gas, coupled with increased domestic liquids volumes. Despite some headwinds like higher depreciation, depletion, and amortization (DD&A) rates and lower NGL prices, OXY's diversified segments, particularly Oil & Gas and Midstream/Marketing, contributed positively to earnings. Operationally, the company maintained stable production levels and showed progress in cost management initiatives. Financially, OXY reported a strong cash position of $3.8 billion, with significant cash flow from operations, further bolstered by favorable working capital changes. The company also continued to return value to shareholders through dividends, although capital expenditures were reduced compared to the previous year. Strategic initiatives are also underway, including the exploration of divesting minority interests in Middle East/North Africa operations and assessing strategic alternatives for certain Rocky Mountain assets, signaling a focus on portfolio optimization.
Financial Highlights
47 data points| Revenue | $6.45B |
| Cost of Revenue | $3.21B |
| Gross Profit | $3.23B |
| Operating Expenses | $459.00M |
| Operating Income | $4.27B |
| Net Income | $1.58B |
| EPS (Basic) | $1.96 |
| EPS (Diluted) | $1.96 |
| Shares Outstanding (Basic) | 805.10M |
| Shares Outstanding (Diluted) | 805.70M |
Key Highlights
- 1Net income for the nine months ended September 30, 2013, remained stable at $4.3 billion, with diluted EPS slightly increasing to $5.28 from $5.25 in the prior year.
- 2Net sales for the nine months increased to $18.3 billion from $18.0 billion in the prior year, primarily driven by higher domestic oil and natural gas prices and increased liquids volumes.
- 3The Oil & Gas segment continues to be the primary revenue and profit driver, though earnings for the nine-month period saw a slight decrease year-over-year due to factors including higher DD&A and lower NGL prices.
- 4The Midstream and Marketing segment showed significant earnings growth, with a 30% increase for the nine-month period, driven by improved marketing/trading performance and better results in pipeline and gas processing.
- 5Cash flow from operating activities increased by $1.3 billion for the nine months of 2013 compared to 2012, largely due to favorable changes in working capital, including a significant tax refund.
- 6Capital expenditures were reduced to $6.4 billion for the first nine months of 2013 from $7.7 billion in the prior year, with continued significant investment in the oil and gas segment.
- 7The company announced strategic actions, including exploring the sale of a minority interest in its Middle East/North Africa operations and evaluating strategic alternatives for certain Rocky Mountain assets.