Summary
Occidental Petroleum Corporation (OXY) reported record core earnings of $4.349 billion ($5.05 per diluted share) for the full year 2006, a significant increase from $3.732 billion ($4.56 per diluted share) in 2005. This strong annual performance was driven primarily by the Oil and Gas segment, which saw a 21% increase in segment earnings to $7.239 billion, benefiting from record crude oil prices and higher production. The Chemical segment also showed improvement, with core earnings rising to $901 million from $777 million in the prior year, attributed to better margins in key products. However, the fourth quarter of 2006 presented a different picture, with net income of $928 million ($1.09 per diluted share) and core earnings of $835 million ($0.98 per diluted share), both lower than the comparable period in 2005. This sequential decline was largely due to a significant drop in natural gas prices and increased operating expenses within the Oil and Gas segment, as well as lower volumes in the Chemicals business. Despite the quarterly dip, the company's full-year results highlight robust operational performance and strong commodity price realization.
Key Highlights
- 1Full-year 2006 core earnings reached a record $4.349 billion, up from $3.732 billion in 2005.
- 2Full-year 2006 diluted earnings per share were $4.86, compared to $6.45 in 2005.
- 3The Oil and Gas segment's full-year earnings increased by 21% to $7.239 billion, driven by higher crude oil prices and production.
- 4Chemical segment core earnings for the full year improved by 16% to $901 million, reflecting stronger margins.
- 5Fourth-quarter 2006 net income decreased to $928 million ($1.09 EPS) from $1.152 billion ($1.40 EPS) in Q4 2005.
- 6Fourth-quarter 2006 core earnings decreased to $835 million ($0.98 EPS) from $1.116 billion ($1.36 EPS) in Q4 2005, primarily due to lower natural gas prices and higher operating costs.
- 7Worldwide daily oil and gas production increased to 616,000 BOE in Q4 2006 and 601,000 BOE for the full year 2006, up from 546,000 BOE and 526,000 BOE respectively in 2005, boosted by acquisitions and organic growth.