Summary
Occidental Petroleum Corporation's Q2 2020 10-Q filing reveals significant financial challenges, largely attributed to the severe downturn in oil prices exacerbated by the COVID-19 pandemic. The company reported a substantial net loss of $8.131 billion for the quarter, primarily driven by massive asset impairments totaling $6.4 billion recognized in the oil and gas segment. This led to a significant reduction in total assets and stockholders' equity compared to the previous year. Despite the challenging environment, Occidental took proactive steps to bolster liquidity. These included substantial reductions in capital expenditures and operating costs, a significant cut in the common stock dividend, and the issuance of new debt to refinance existing maturities. The company also strategically managed its debt, extending maturities and continuing to pursue asset divestitures. While liquidity appears sufficient for the next 12 months, management acknowledges the uncertainty of the market and the potential need for additional liquidity sources.
Financial Highlights
49 data points| Revenue | $2.93B |
| Cost of Revenue | $577.00M |
| Gross Profit | $2.35B |
| SG&A Expenses | $225.00M |
| Operating Income | -$8.73B |
| Net Income | -$8.13B |
| EPS (Basic) | $-9.12 |
| EPS (Diluted) | $-9.12 |
| Shares Outstanding (Basic) | 915.50M |
| Shares Outstanding (Diluted) | 915.50M |
Key Highlights
- 1Significant net loss of $8.131 billion for the quarter, largely due to $6.4 billion in asset impairments in the oil and gas segment.
- 2Total assets decreased from $109.3 billion at the end of 2019 to $89.5 billion at June 30, 2020, reflecting the impact of impairments and asset sales.
- 3Stockholders' equity dropped from $34.2 billion to $23.3 billion, primarily due to the net loss.
- 4Proactive liquidity measures were implemented, including a more than 50% reduction in the 2020 capital budget to $2.4-$2.6 billion and over $1.0 billion in expected cash savings from operating and corporate cost cuts.
- 5The quarterly common stock dividend was reduced to $0.01 per share, a significant cut from $0.78 in the prior year's quarter, to preserve liquidity.
- 6The company issued $2.0 billion in senior unsecured notes in July 2020 to refinance approximately $2.0 billion of 2021 maturities.
- 7Ghana assets were reclassified as held for sale, with a $1.4 billion after-tax impairment recorded to adjust them to fair value less costs to sell.