10-QPeriod: Q3 FY2023

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 7, 2023For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported revenues of $7.16 billion for the third quarter of 2023, a decrease from $9.39 billion in the same period last year, primarily due to lower commodity prices. Net income attributable to common stockholders was $1.16 billion, or $1.20 per diluted share, down from $2.55 billion, or $2.52 per diluted share, in Q3 2022. For the nine months ended September 30, 2023, net income attributable to common stockholders was $2.74 billion, a significant decrease from $10.78 billion in the prior year period. Despite revenue declines, the company generated robust operating cash flow of $9.1 billion year-to-date, supporting investments in its core businesses and low-carbon ventures, shareholder returns through dividends and share repurchases, and debt reduction efforts. Notably, Occidental completed the acquisition of the remaining interest in Carbon Engineering and entered into a joint venture with BlackRock for a Direct Air Capture plant, highlighting its strategic focus on low-carbon initiatives.

Financial Highlights

47 data points
Beta

Revenue

$7.27B

90.6% Gross Margin

Net Income

$1.38B

18.9% Net Margin

EPS (Diluted)

$1.20

Total Assets

$71.83B

Cash & Equivalents

$611.00M

Free Cash Flow

$1.51B

Financial Statements
Beta
Revenue$7.27B
Cost of Revenue$682.00M
Gross Profit$6.59B
SG&A Expenses$258.00M
Net Income$1.38B
EPS (Basic)$1.30
EPS (Diluted)$1.20
Shares Outstanding (Basic)884.00M
Shares Outstanding (Diluted)958.20M

Key Highlights

  • 1Third quarter 2023 revenues decreased to $7.16 billion from $9.39 billion in Q3 2022, reflecting lower commodity prices.
  • 2Net income attributable to common stockholders for Q3 2023 was $1.16 billion ($1.20/share), down from $2.55 billion ($2.52/share) in Q3 2022.
  • 3Year-to-date operating cash flow remained strong at $9.1 billion, despite lower commodity prices compared to the prior year.
  • 4The company repurchased $1.6 billion of treasury stock and redeemed $342 million face value of preferred stock in Q3 2023 as part of its shareholder return framework.
  • 5Occidental completed the acquisition of Carbon Engineering Ltd. in November 2023, signaling a strategic push into direct air capture technology.
  • 6A joint venture with BlackRock was announced for the development of a large-scale Direct Air Capture plant, further demonstrating commitment to low-carbon ventures.

Frequently Asked Questions

The primary driver for the revenue decrease was lower commodity prices for oil and gas. While commodity prices saw some recovery in the third quarter of 2023, they were still significantly lower than the average prices experienced in the third quarter of 2022.

Occidental generated $9.1 billion in operating cash flow year-to-date, which it is using to fund capital expenditures, shareholder returns, and debt reduction. The company has no remaining debt maturities in 2023 and aims to opportunistically reduce financial leverage while maintaining its shareholder return framework, including dividends and share repurchases.

The acquisition of Carbon Engineering and the joint venture with BlackRock underscore Occidental's strategic commitment to advancing its low-carbon ventures. These initiatives are expected to accelerate technological innovation and cost reductions in direct air capture technology, positioning Occidental as a leader in carbon management solutions.

Occidental expects oil and gas prices to remain volatile due to geopolitical risks, macroeconomic factors, and OPEC+ decisions. The company aims to manage inflation through operational efficiencies and contract management. Its capital priorities for 2023 focus on maximizing cash flow, preserving its asset base, returning capital to shareholders, and reducing leverage.