10-QPeriod: Q1 FY2023

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 9, 2023For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported its first-quarter 2023 financial results, showing a significant decrease in net income and earnings per share compared to the same period in 2022. This decline was primarily driven by lower commodity prices for oil and natural gas, as well as reduced demand and pricing in the chemical segment. Despite these headwinds, the company generated strong operating cash flow and maintained capital discipline. Key financial metrics indicate a shift from a very strong Q1 2022 to a more challenging Q1 2023, reflecting the volatile energy market. The company continues to prioritize shareholder returns through dividends and share buybacks, while also working to manage its debt and environmental liabilities. Investors should note the ongoing focus on operational efficiencies and strategic investments in low-carbon ventures.

Financial Highlights

45 data points
Beta

Revenue

$7.12B

89.5% Gross Margin

Net Income

$1.26B

17.8% Net Margin

EPS (Diluted)

$1.00

Total Assets

$71.60B

Cash & Equivalents

$1.17B

Free Cash Flow

$1.41B

Financial Statements
Beta
Revenue$7.12B
Cost of Revenue$745.00M
Gross Profit$6.37B
SG&A Expenses$241.00M
Net Income$1.26B
EPS (Basic)$1.08
EPS (Diluted)$1.00
Shares Outstanding (Basic)901.20M
Shares Outstanding (Diluted)975.30M

Key Highlights

  • 1Net income attributable to common stockholders decreased to $983 million ($1.00 per diluted share) in Q1 2023 from $4,676 million ($4.65 per diluted share) in Q1 2022.
  • 2Net sales declined to $7.225 billion in Q1 2023 from $8.349 billion in Q1 2022, primarily due to lower commodity prices.
  • 3Operating cash flow remained robust at $2.9 billion in Q1 2023, though slightly down from $3.2 billion in Q1 2022.
  • 4Capital expenditures increased to $1.5 billion in Q1 2023 from $0.86 billion in Q1 2022, reflecting investments in core businesses and low-carbon ventures.
  • 5The company repurchased $732 million of treasury stock and paid $320 million in dividends (common and preferred) during Q1 2023.
  • 6Occidental triggered mandatory redemptions of preferred stock totaling $712 million in Q1 2023, with $551 million settled post-quarter.
  • 7Moody's upgraded Occidental's long-term debt rating to investment grade (Baa3) in March 2023.

Frequently Asked Questions

The primary drivers for the decrease in net income were significantly lower realized prices for crude oil and natural gas, impacting the oil and gas segment. Additionally, the chemical segment experienced lower realized pricing and reduced demand across most product lines.

Occidental generated $2.9 billion in operating cash flow in Q1 2023. The company continues its shareholder return program with a sustainable common share dividend and an active share buyback plan. It also made progress on reducing financial leverage, including mandatory redemptions of preferred stock triggered by distributions to common shareholders. The company's long-term debt rating was upgraded to investment grade by Moody's in March 2023.

Occidental's priorities for 2023 include maximizing cash flow through operational efficiencies and capital discipline, preserving and enhancing its existing asset base with investments in core businesses and low-carbon ventures, continuing shareholder returns via dividends and share buybacks, and opportunistically reducing financial leverage.

Occidental continues to manage significant environmental liabilities, particularly related to the Diamond Alkali Superfund Site (DASS). The company is actively involved in legal proceedings concerning the DASS, including challenging a proposed EPA settlement that could significantly impact its financial obligations. Occidental has accrued reserves for known liabilities and has estimated a range for reasonably possible additional losses, but the ultimate liability remains subject to ongoing legal and regulatory developments.