10-QPeriod: Q2 FY2018

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2018

Filed August 8, 2018For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation reported a significant increase in financial performance for the six months ended June 30, 2018, compared to the same period in 2017. Net income surged to $1.56 billion from $624 million, driven by higher crude oil prices, increased domestic volumes in the oil and gas segment, improved marketing margins, and favorable chemical segment performance. This resulted in a strong rise in diluted earnings per share to $2.02 from $0.81. The company's balance sheet shows total assets growing to $44.07 billion from $42.03 billion, primarily due to an increase in current assets and property, plant, and equipment. Liabilities also increased, largely driven by higher long-term debt and accounts payable. Occidental maintained a strong cash flow from operations, generating $2.76 billion, which was utilized for capital expenditures and dividend payments.

Financial Highlights

46 data points
Beta

Revenue

$4.08B

66.6% Gross Margin

Net Income

$843.00M

20.6% Net Margin

EPS (Diluted)

$1.10

Total Assets

$44.07B

Cash & Equivalents

$1.36B

Free Cash Flow

$469.00M

Financial Statements
Beta
Revenue$4.08B
Cost of Revenue$1.36B
Gross Profit$2.72B
Net Income$843.00M
EPS (Basic)$1.10
EPS (Diluted)$1.10
Shares Outstanding (Basic)765.70M
Shares Outstanding (Diluted)767.40M

Key Highlights

  • 1Net income more than doubled year-over-year for the six months ended June 30, 2018, reaching $1.56 billion, driven by improved commodity prices and segment performance.
  • 2Diluted EPS significantly increased to $2.02 for the first six months of 2018, up from $0.81 in the prior year's comparable period.
  • 3Total assets grew to $44.07 billion as of June 30, 2018, an increase from $42.03 billion at the end of 2017, reflecting growth in current assets and PP&E.
  • 4Net cash provided by operating activities remained robust at $2.76 billion for the first six months of 2018.
  • 5The company issued $1.0 billion in senior notes due 2048 and repaid $500 million in maturing debt during the period.
  • 6Capital expenditures increased to $2.32 billion for the first six months of 2018, primarily in the oil and gas segment.
  • 7Occidental announced plans to sell non-core domestic midstream assets, including pipelines and terminals, to streamline operations.

Frequently Asked Questions

The primary drivers were significantly higher crude oil and NGL prices, increased domestic production volumes, particularly from Permian Resources, and improved marketing margins in the midstream segment. The chemical segment also contributed positively with strong realized caustic soda prices and favorable plant margins.

Occidental increased its long-term debt by issuing $1.0 billion in senior notes due 2048. Concurrently, the company repaid $500 million in maturing senior notes. Overall, net long-term debt increased from $9.33 billion at the end of 2017 to $10.31 billion at June 30, 2018.

Occidental announced its intention to sell non-core domestic midstream assets, including pipelines and terminals, as part of a strategic move to focus on core operations. A substantial portion of these assets were already classified as 'assets held for sale' on the balance sheet as of June 30, 2018.

Capital expenditures increased to $2.32 billion for the first six months of 2018, up from $1.49 billion in the same period of 2017. The majority of these investments were directed towards the oil and gas segment, with $2.1 billion allocated to this area.