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Editor’s note: This story has been updated to correct the time of Occidental’s earnings call.
Occidental Petroleum Corp.’s (NYSE:OXY) second-quarter earnings exceeded analyst expectations after Wednesday’s close, but analysts still gave the oil and gas company a neutral outlook.
Occidental reported second-quarter revenue of $6.82 billion, which beat a Street consensus estimate of $6.80 billion, according to data from Benzinga Pro.
Quarterly earnings per share of $1.03 beat analysts’ estimates of 77 cents per share.
“We rate Occidental Petroleum (OXY) Neutral due to its more levered balance sheet, the slowing of its chemicals business, its lower long-term production growth rate vs. peers, and its strategy of selling assets in a weaker environment,” Roth Capital Partners analyst Leo Mariani wrote in a note.
But he also noted Occidental’s Chemicals sector posted $296 million in pre-tax income, which was in line with its prior guidance of $300 million as the company beat analyst expectations.
Read Also: Occidental Sells Certain Delaware Basin Assets, Boosts Debt Reduction Efforts
He also pointed out its MidStream segment registered $49 million in pre-tax earnings, after excluding $67 million in one-time items and non-cash losses, which was $184 million higher than the midpoint of its previous guidance of $85 million to $185 million in pre-tax losses.
“Overall, we expect OXY to have a positive reaction vs. peers.”
Scotiabank analyst Paul Cheng also acknowledged the earnings beat and assigned a Sector Outperform rating to the stock while noting the performance of the OxyChem and Upstream divisions was in line with Wall Street expectations.
“We think OXY's 2Q24 results will have a neutral impact on near-term share price performance,” he wrote in a note.
“The bulk of the positive variance was driven by the significant Midstream beat.”
Occidental is scheduled to have an earnings call with analysts at 1 p.m. E.T. Thursday.
Price Action: Occidental gained 4.05% to $58.38 by Thursday’s mid-day trading, while exchange-traded funds that track the stock also trended upward.
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