Occidental Petroleum Q3 Earnings Preview: Cautious tone amid debt woes

Occidental Petroleum (NYSE:OXY) is scheduled to announce Q3 earnings results on Tuesday, November 12th, after market close.

JP Morgan recently began coverage of Occidental (OXY) with a Neutral rating, noting the oil and gas company has made transformational acquisitions to bolster its position in U.S. shale and has significantly reduced debt since 2021, but “more work needs to be done on the balance sheet following the incremental leverage assumed in the CrownRock acquisition.”

All eyes will be on updates to Occidental’s debt reduction plan, which targets cutting $4.5B within a year of the CrownRock transaction that closed in August.

Recent SA contributor analysis has been more bearish, with Envision Research calling its peer Exxon Mobil (XOM) a “more profitable but also cheaper” option. Exxon topped Wall Street expectations in its Q3 report last week, but earnings were still down from a year ago, even as net production rose thanks.

SA contributor Daniel Jones highlighted recent weakness in shares and the company’s balance sheet. Occidental’s (OXY) shares have dropped over 15% YTD and 19% in the last six months.

“The firm should generate significant cash flow moving forward, but this doesn’t make it an appealing prospect at this point in time,” according to Jones.

The consensus EPS Estimate is $0.75 (-36.4% Y/Y) and the consensus Revenue Estimate is $7.12B (-3.8% Y/Y).

Over the last 2 years, OXY has beaten EPS estimates 50% of the time and has beaten revenue estimates 38% of the time.

Over the last 3 months, EPS estimates have seen 1 upward revision and 16 downward. Revenue estimates have seen 3 upward revisions and 3 downward.