Can Occidental Petroleum Report Net Profit in 1Q17?



EPS estimates

For 1Q17, excluding one-time items, the current consensus EPS (earnings per share) estimate for Occidental Petroleum (OXY) is $0.07 per share, based on an adjusted net income of ~$71 million.

But on a YoY (year-over-year) basis, Occidental Petroleum is expected to turn its losses into profit in 1Q17. OXY reported adjusted EPS of -$0.56 in 1Q16. Excluding one-time items, OXY’s 1Q17 consensus net income estimate is also higher than in 3Q16. OXY reported an adjusted EPS of -$0.13 in 1Q16.

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Why OXY expects higher net income in 1Q17

The higher net income estimates in 1Q17 for OXY can be attributed to the company’s expected production growth. For 1Q17, Occidental Petroleum expects the production from its ongoing operations to be in a range of 590–595 Mboepd, which would be a midpoint increase of ~5% over its 1Q16 production.

How OXY’s net income performed in 4Q16

In most recent earnings release in February 2017, Occidental Petroleum reported a bigger-than-expected loss of ~$97 million. Wall Street analysts were expecting a smaller loss of ~$10 million. On a YoY (year-over-year) basis, OXY cut its losses by more than 25% in 4Q16, as compared to its loss of ~$129 million in 4Q15. Excluding one-time items, OXY reduced its losses by ~13% from its loss of ~$112 million in 3Q16.

By comparison, peers Diamondback Energy (FANG) and EOG Resources (EOG) reported net income of around -$2.2 million (about -$0.03 per share) and -$190 million (nearly -$0.35 per share), respectively, in 4Q16.


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