What were the main drivers behind Occidental Petroleum's improved Q3 2007 results?

The primary driver was the strong performance of the Oil and Gas segment, which benefited from higher average crude oil prices and increased daily production volumes. These factors led to a significant increase in segment earnings compared to the same period in 2006.

How did the Chemicals segment perform in Q3 2007?

The Chemicals segment experienced a decline in earnings for the third quarter of 2007, reporting $212 million compared to $248 million in the third quarter of 2006. This decrease was attributed to lower profit margins on polyvinyl chloride.

What is 'core results' and why does Occidental Petroleum highlight it?

'Core results' is a non-GAAP (Generally Accepted Accounting Principles) measure that Occidental management uses to provide investors with a view of earnings performance that excludes significant transactions and events, which can be unpredictable in nature and timing. Management believes this measure is useful for comparing earnings performance between periods, though reported earnings are considered representative of long-term performance.

What were the significant gains or charges reported for the nine-month period of 2007?

The nine-month period of 2007 included several significant after-tax gains, such as $412 million from the sale of Oxy's Russian investment, $112 million from litigation settlements, and gains from the sale of exploration properties and domestic oil and gas interests. It also included a $107 million charge for debt tender offers and a $30 million provision for a plant closure and environmental remediation reserve.

OXY/OXY-WT 8-K: Earnings & Results

Summary

Occidental Petroleum Corporation (OXY) reported strong third-quarter 2007 financial results, demonstrating significant year-over-year growth in both net income and core results. Net income rose to $1.324 billion ($1.58 per diluted share) from $1.170 billion ($1.36 per diluted share) in the prior year quarter. The company highlighted record core results of $1.210 billion ($1.45 per diluted share) for Q3 2007, an increase from $1.103 billion ($1.28 per diluted share) in Q3 2006, driven by robust performance in its Oil and Gas segment. The Oil and Gas segment was the primary driver of this performance, with earnings reaching $2.029 billion in Q3 2007 compared to $1.790 billion in Q3 2006. This growth was attributed to higher crude oil prices and increased production volumes. Despite strong segment earnings, the Chemicals segment experienced a decline due to lower polyvinyl chloride margins. For the nine-month period, net income also saw a substantial increase, though core results were impacted by significant gains from asset sales and other corporate activities.

Key Highlights

1Occidental Petroleum reported a 13.2% increase in net income to $1.324 billion for Q3 2007, compared to $1.170 billion in Q3 2006.
2Third-quarter 2007 core results reached a record high of $1.210 billion, a 9.7% increase from $1.103 billion in Q3 2006.
3The Oil and Gas segment was a key performer, with Q3 2007 earnings of $2.029 billion, up from $1.790 billion in the prior year quarter.
4Daily oil and gas production increased to an average of 570,000 barrels of oil equivalent (BOE) per day in Q3 2007, up from 533,000 BOE per day in Q3 2006.
5Higher crude oil prices (West Texas Intermediate averaging $75.38/barrel in Q3 2007 vs. $70.53/barrel in Q3 2006) and increased production volumes were cited as primary drivers for the Oil and Gas segment's improved performance.
6The Chemicals segment saw a decrease in earnings for both the third quarter and nine-month periods due to lower polyvinyl chloride margins.
7The company provided detailed reconciliations between reported net income and 'core results,' a non-GAAP measure that excludes certain significant transactions and events.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Financial Results (Oct 24, 2007)

Summary

Key Highlights

Frequently Asked Questions