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How Did OXY’s 1Q16 Earnings Compare to Estimates?

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Occidental Petroleum’s 1Q16 earnings missed estimates

Occidental Petroleum (OXY) announced its 1Q16 earnings on May 5, 2016, before the market opened. OXY reported adjusted earnings per share (or EPS) of -$0.56, $0.16 lower than Wall Street analysts’ consensus estimate of -$0.40 per share.

Occidental Petroleum’s 1Q16 EPS fell by $0.60 compared to its 1Q15 EPS $0.04. Even compared sequentially with 4Q15, Occidental Petroleum’s 1Q16 EPS fell by $0.39.

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Occidental Petroleum’s 1Q16 revenue beat estimates

For 1Q16, OXY reported adjusted revenue of ~$2.1 billion, ~8% better than Wall Street analysts’ consensus estimate of ~$2.0 billion. Occidental Petroleum’s 1Q16 revenue fell by ~31% compared to its 1Q15 revenue of ~$3.1 billion. Even when compared sequentially with 4Q15, OXY’s 1Q16 revenue fell by ~25%.

OXY’s earnings trend

As seen in the above chart, Occidental Petroleum reported much lower earnings in 2015 due to lower realized crude oil (USO) (UWTI) (DWTI) and natural gas (UNG) (BOIL) prices. In 4Q15, Occidental Petroleum saw its adjusted EPS turn negative for the first time since 2009. Since 1Q13, Occidental Petroleum has beat earnings expectations ~54% of the time.

Due to the steep downward trend in energy prices, many upstream companies such as Marathon Oil (MRO), Diamondback Energy (FANG), and EnCana (ECA) have reported ~52%, ~36%, and ~40% year-over-year falls in their 1Q16 adjusted revenues, respectively.

The Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x Shares ETF (DRIP) is a leveraged inverse ETF that invests in oil and gas exploration and production companies. The Direxion Daily Energy Bull 3X ETF (ERX) is a leveraged ETF that invests in domestic companies from the energy sector.

In this series. . .

Having analyzed Occidental Petroleum’s 1Q16 earnings performance, in the course of this series, we’ll also look at OXY’s operational performance, Wall Street analysts’ ratings, and how Occidental Petroleum’s stock price reacted to OXY’s past earnings misses.

Now let’s take a look at OXY’s operational performance in 1Q16.

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