Summary
Occidental Petroleum Corporation (OXY) reported strong financial results for the fourth quarter and full year 2004, driven by significant increases in both its Oil and Gas and Chemicals segments. The company's net income for the fourth quarter of 2004 surged to $665 million ($1.67 per share), a substantial improvement from $382 million ($0.99 per share) in the prior year's quarter. For the full year 2004, net income reached a record $2.491 billion ($6.30 per share), marking a 58% increase compared to $1.527 billion ($3.98 per share) in 2003. These impressive gains were primarily attributed to higher worldwide crude oil and natural gas prices, which boosted the Oil and Gas segment's earnings by 53% in the fourth quarter and 33% for the full year. The Chemicals segment also demonstrated robust performance, with earnings up 81% in the fourth quarter and 87% for the full year, due to higher sales prices across major products, despite increased ethylene and energy costs. While the results were strong, investors should note that the comparability of Q4 2004 earnings to prior periods was affected by approximately $69 million ($0.17 per share) in net charges and a tax credit.
Key Highlights
- 1Occidental Petroleum reported a record net income of $2.491 billion ($6.30 per share) for the full year 2004, a 58% increase from $1.527 billion ($3.98 per share) in 2003.
- 2Fourth quarter 2004 net income was $665 million ($1.67 per share), up significantly from $382 million ($0.99 per share) in the fourth quarter of 2003.
- 3The Oil and Gas segment showed strong performance, with fourth quarter 2004 earnings of $977 million, a 53% increase year-over-year, driven by higher crude oil and natural gas prices.
- 4Full-year 2004 earnings for the Oil and Gas segment reached a historical high of $3.544 billion, up 33% from 2003.
- 5The Chemicals segment also saw substantial growth, with fourth quarter 2004 earnings of $130 million (up 81% year-over-year) and full-year earnings of $412 million (up 87% year-over-year), attributed to higher sales prices.
- 6The company announced a decision to exit the specialty vinyls resins chemical business, resulting in a $32 million after-tax charge in the fourth quarter of 2004.
- 7Capital expenditures for the full year 2004 increased to $1.843 billion, up from $1.600 billion in 2003, indicating ongoing investment in the business.