10-QPeriod: Q3 FY2022

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 8, 2022For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported strong financial performance in the third quarter and first nine months of 2022, driven by significantly higher commodity prices compared to the prior year. Net sales for the nine months ended September 30, 2022, increased by 57% year-over-year to $28.4 billion, with substantial growth across all segments: oil and gas, chemical, and midstream and marketing. The company demonstrated robust operational cash flow of $12.8 billion for the first nine months of 2022, a significant increase from $7.3 billion in the same period of 2021. This strong cash generation allowed OXY to actively reduce its long-term debt, repaying $8.3 billion during the period, thereby lowering its financial leverage. The company also continued its commitment to shareholder returns through a sustainable dividend and an active share repurchase program, demonstrating a balanced approach to capital allocation.

Financial Highlights

48 data points
Beta

Revenue

$9.36B

91.1% Gross Margin

Net Income

$2.75B

29.3% Net Margin

EPS (Diluted)

$2.52

Total Assets

$72.14B

Cash & Equivalents

$1.23B

Free Cash Flow

$3.12B

Financial Statements
Beta
Revenue$9.36B
Cost of Revenue$835.00M
Gross Profit$8.52B
SG&A Expenses$247.00M
Operating Income$11.38B
Net Income$2.75B
EPS (Basic)$2.74
EPS (Diluted)$2.52
Shares Outstanding (Basic)922.00M
Shares Outstanding (Diluted)1.00B

Key Highlights

  • 1Net sales surged to $28.4 billion for the first nine months of 2022, a 57% increase year-over-year, driven by higher commodity prices.
  • 2Operating cash flow from continuing operations was $12.8 billion for the first nine months of 2022, up from $7.3 billion in the prior year, indicating strong operational performance.
  • 3The company significantly reduced its long-term debt, using $8.3 billion in cash for debt repayments in the first nine months of 2022.
  • 4Shareholder returns remain a priority, with $369 million in dividends declared and 41.0 million common shares repurchased during the first nine months of 2022.
  • 5The Oil and Gas segment income before taxes reached $10.3 billion for the first nine months of 2022, a substantial increase from $2.0 billion in the prior year.
  • 6A notable non-cash tax benefit of $2.6 billion was recorded in Q1 2022 due to a legal entity reorganization, significantly impacting the effective tax rate for the nine-month period.
  • 7Total assets decreased to $72.1 billion as of September 30, 2022, from $75.0 billion as of December 31, 2021, primarily due to debt reduction.

Frequently Asked Questions

The primary driver is the significant increase in commodity prices, particularly for oil, NGLs, and natural gas, compared to the same period in 2021. This is reflected in the substantial rise in net sales and income across all operating segments.

Occidental Petroleum is actively managing its debt by prioritizing debt reduction. For the nine months ended September 30, 2022, the company used $8.3 billion of cash to repay long-term debt, significantly reducing its outstanding debt balance and financial leverage.

The legal entity reorganization completed in the first quarter of 2022 resulted in a significant non-cash tax benefit of $2.6 billion recognized in Q1 2022. This benefit reduced Occidental's deferred tax liabilities and lowered the effective tax rate for the nine-month period to 3% from 27% in the prior year.

The company is executing a balanced capital allocation strategy. It has used substantial operating cash flow to reduce debt while also continuing to return value to shareholders through dividends and an active share repurchase program, demonstrating a commitment to both financial health and investor returns.