Occidental Petroleum Corporation
) fourth quarter 2011 operating earnings jumped 27.8% to $2.02 per
share from $1.58 per share in the year-ago quarter. Earnings beat
the Zacks Consensus expectation for the quarter by 6 cents.
GAAP net earnings during the quarter were $2.01 per share versus
$1.49 per share reported in the year-ago quarter. The difference
between operating and GAAP earnings of 1 cent was due to the loss
from discontinued operations.
Occidental's adjusted earnings for full year 2011 were $8.39 per
share, surpassing the Zacks estimate of $8.32. The company's
earnings grew significantly by 46.7% from the 2010 figure of $5.72
GAAP net earnings during fiscal 2011 were $8.32 per share versus
$5.56 per share reported in the last fiscal.
Occidental's quarterly revenue increased 19.2% to $6.03 billion
from $5.06 billion in the year-ago quarter. Total revenue increased
on the back of higher contributions from the
Oil and Gas
segments. This was marginally offset by a decrease in contribution
Marketing and Other
The top line was ahead of the Zacks Consensus Estimate of $5.79
Occidental's fiscal 2011 revenue increased 25.7% to $23.93
billion from $19.04 billion in the year-ago quarter.
Full year revenues scraped past the Zacks Consensus Estimate of
Fiscal Production, Sales and Realized Price
Occidental's average daily production volumes notched 733
thousand barrels of oil equivalents (MBOE) in fiscal 2011, up 3.8%
year over year. The volume expansion was mainly due to strong
production from domestic operations, particularly from fresh
projects in South Texas, California and the Williston Basin. Higher
production in Oman's Mukhaizna field and Iraq also boosted output.
However, this was partly offset by lower volumes from Middle
East/North Africa and Libya due to the impact of pricing and
production sharing contracts.
Occidental's daily oil and gas sales volumes during the year
were 731 MBOE, up 4.3% from 701 MBOE a year ago.
Occidental's overall realized price for crude oil increased
30.3% to $97.92 per barrel from the prior-year level of $75.16 per
barrel, while realized NGL prices rose 23.2% to $55.53 per barrel
from the prior-year level of $45.08 per barrel. For the fiscal
realized gas prices declined by 10 cents per thousand cubic feet (
) to $3.01 per MCF from $3.11 per MCF last year.
For fiscal 2011, segment earnings were $11.55 billion versus
$8.06 billion at the end of fiscal 2010. The results were boosted
by a strong show at its
Oil & Gas
Oil & Gas:
Earnings from this segment were $10.24 billion, up 43.2% from $7.15
billion reported last year. The improvement emanated from higher
crude oil prices and higher volumes, offset partially by higher
Earnings were $861 million versus $438 million in 2010. The
year-over-year growth was attributable to strong export sales and
higher margins resulting from rising demand across most
Midstream, Marketing and Other:
Segment earnings were $448 million, down by $24 million from the
year-ago level. The decline was primarily attributable to lower
trading results, marginally offset by higher income from its
Occidental continues to generate strong cash flow from
operations. In fiscal 2011, the company generated $12.3 billion in
cash flow, up from the year-ago level of $9.6 billion.
Capital expenditure for 2011 was $7.52 billion compared with
$3.9 billion in 2010. The majority of the expenditure was directed
towards the development of its
Midstream, Marketing and Other
Total long-term debt as of December 31, 2011, was $5.87 billion
compared with $5.11 billion as of December 30, 2010. The company's
total debt-to-capitalization ratio at quarter end was 13%, down by
a percentage point from the year-end 2010 ratio.
The company's primary competitor
Exxon Mobil Corp.
) is expected to announce its operating earnings for fiscal 2011 on
January 31, 2012. Analysts polled by Zacks expect Exxon Mobil to
clock earnings of $2.00 and $8.45 per share for fourth quarter and
fiscal 2011, respectively.
The results of the company were driven by higher realized prices
and sales volume expansion. However, the decrease in the realized
gas price in fiscal 2011 remains a cause of concern. Given the
present market scenario, we believe Occidental will continue to
benefit from rising oil prices given its oil-heavy production and
Occidental has been regularly paying dividends to its
shareholders for more than three and a half decades now. We
appreciate this gesture to increase shareholder worth.
Based in Los Angeles, California, Occidental Petroleum along
with its subsidiaries operates as an oil and gas exploration and
production company. Occidental has operations in the United States,
Middle East/North Africa and Latin America. The company presently
retains a short-term Zacks #2 Rank, which translates into a
short-term Buy rating.
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