Why is reported EPS ($3.13) so much higher than adjusted EPS ($1.06)?

The gap is mainly the $3.1 billion of after-tax income from discontinued operations, primarily the gain on the sale of the OxyChem chemical business. Adjusted results exclude this gain as well as items such as crude derivative losses, early debt redemption premiums, and asset-related charges, so adjusted EPS better reflects ongoing operations.

How much debt has Occidental paid down, and what is the remaining target?

The company repaid $7.1 billion of principal debt through May 5, 2026, bringing principal debt down to $13.3 billion. Management is working toward a $10.0 billion milestone. Balance sheet long-term debt fell from $20.6 billion at December 31, 2025 to $15.2 billion at March 31, 2026.

Did Occidental generate strong cash flow in the quarter?

Operating cash flow from continuing operations was $1.4 billion, but this included a $1.8 billion working capital use, mainly higher receivables from the sharp March increase in commodity prices plus seasonal first-quarter payments. Operating cash flow before working capital was $3.2 billion, and free cash flow before working capital from continuing operations was $1.7 billion.

What drove the quarter's operating performance?

Higher realized crude prices, which rose 18% sequentially to $69.91/bbl, lifted oil and gas pre-tax income to $1.0 billion from $0.7 billion in Q4 2025. Production of 1,426 Mboed beat guidance, though lower volumes partially offset the price benefit. Midstream and marketing results also beat guidance on an adjusted basis.

What are the main risks or items to watch going forward?

Key items include the rise in receivables and working capital tied to commodity price volatility, the timing of remaining debt reduction toward $10.0 billion, ongoing derivative exposure (the Q1 crude derivative losses were $369 million pre-tax), and the impact of Middle East conflicts on operations, which management cited as a challenge. Sustained domestic gas price weakness, with realizations down to $1.01/Mcf, is also relevant.

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

01—Abstract

Summary

Summary of the 8-K filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.

Occidental Petroleum (OXY) reported first quarter 2026 results on May 5, 2026, with reported net income attributable to common stockholders of $3.2 billion^a, or $3.13 diluted EPS, driven largely by the gain on the sale of OxyChem within discontinued operations.

Adjusted EPS from continuing operations was $1.06^b, versus $0.87 in the first quarter of 2025, reflecting strong operational performance: production of 1,426 Mboed exceeded the high end of guidance, and midstream and marketing adjusted results beat the top of guidance. Higher realized crude prices ($69.91/bbl, up 18% sequentially) lifted oil and gas pre-tax income to $1.0 billion, partially offset by lower volumes and a $369 million pre-tax domestic crude derivative loss that is excluded from adjusted results. The central investor theme is deleveraging.

The company repaid $7.1 billion^c of principal debt through May 5, reducing principal debt to $13.3 billion and moving toward a $10.0 billion target. Long-term debt on the balance sheet fell from $20.6 billion at year-end 2025 to $15.2 billion at March 31, 2026, and cash rose to $3.8 billion. Free cash flow before working capital from continuing operations was $1.7 billion, while reported operating cash flow from continuing operations was $1.4 billion after a $1.8 billion working capital build driven by higher receivables from the March commodity price spike and seasonal first-quarter outflows.

Investors should weigh the quality of the earnings headline. Reported EPS is inflated by the $3.1 billion^d of discontinued operations income tied to the OxyChem sale, while continuing operations contributed only $0.05 per diluted share on a reported basis due to $1.0 billion of after-tax items affecting comparability, including derivative losses, early debt extinguishment costs of $237 million pre-tax, and midstream asset charges. The debt paydown and lower interest burden are the key positives, while the rise in trade receivables and the Middle East-related operating environment remain points to monitor.

02—Key points

Key Highlights

Reported diluted EPS of $3.13 included roughly $3.08 per share from discontinued operations, mainly the gain on the OxyChem sale; continuing operations reported EPS was about $0.05.
Adjusted EPS from continuing operations was $1.06, compared with $0.87 in Q1 2025 and $2.21 in Q4 2025 (adjusted EPS fell sequentially).
Principal debt reduced to $13.3 billion after $7.1 billion of repayments through May 5, 2026; company is progressing toward a $10.0 billion milestone.
Free cash flow before working capital from continuing operations was $1.7 billion; reported operating cash flow from continuing operations was $1.4 billion after a $1.8 billion working capital use.
Total production of 1,426 Mboed exceeded the high end of guidance, led by the Permian, Rockies and Gulf of America; worldwide realized oil price rose 18% sequentially to $69.91/bbl.
Midstream and marketing reported a pre-tax loss of $87 million on a reported basis, but adjusted results exceeded the high end of guidance; WES equity income was $138 million.
Domestic gas realizations fell 10% sequentially to $1.01/Mcf, and the company recorded $369 million of pre-tax domestic crude derivative losses excluded from adjusted results.

03—Questions

Frequently Asked Questions

Why is reported EPS ($3.13) so much higher than adjusted EPS ($1.06)?
The gap is mainly the $3.1 billion of after-tax income from discontinued operations, primarily the gain on the sale of the OxyChem chemical business. Adjusted results exclude this gain as well as items such as crude derivative losses, early debt redemption premiums, and asset-related charges, so adjusted EPS better reflects ongoing operations.
How much debt has Occidental paid down, and what is the remaining target?
The company repaid $7.1 billion of principal debt through May 5, 2026, bringing principal debt down to $13.3 billion. Management is working toward a $10.0 billion milestone. Balance sheet long-term debt fell from $20.6 billion at December 31, 2025 to $15.2 billion at March 31, 2026.
Did Occidental generate strong cash flow in the quarter?
Operating cash flow from continuing operations was $1.4 billion, but this included a $1.8 billion working capital use, mainly higher receivables from the sharp March increase in commodity prices plus seasonal first-quarter payments. Operating cash flow before working capital was $3.2 billion, and free cash flow before working capital from continuing operations was $1.7 billion.
What drove the quarter's operating performance?
Higher realized crude prices, which rose 18% sequentially to $69.91/bbl, lifted oil and gas pre-tax income to $1.0 billion from $0.7 billion in Q4 2025. Production of 1,426 Mboed beat guidance, though lower volumes partially offset the price benefit. Midstream and marketing results also beat guidance on an adjusted basis.
What are the main risks or items to watch going forward?
Key items include the rise in receivables and working capital tied to commodity price volatility, the timing of remaining debt reduction toward $10.0 billion, ongoing derivative exposure (the Q1 crude derivative losses were $369 million pre-tax), and the impact of Middle East conflicts on operations, which management cited as a challenge. Sustained domestic gas price weakness, with realizations down to $1.01/Mcf, is also relevant.

04—Continue

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