Occidental Petroleum posts $3.6 bln profit, resumes buybacks
Occidental Petroleum Corp (OXY.N) posted a rise in second-quarter profit, paid down debt and resumed a buyback program as the U.S. producer benefited from higher crude prices.
The company’s net earnings attributable to common stockholders were $3.6 billion, or $3.47 per share, in the second quarter, compared with a $97 million loss, or $0.10 per share, in the same period last year.
The company reduced its gains from the first quarter, when it posted $4.7 billion in profits, or $4.65 per share.
Occidental has recovered from loading up on debt to buy Anadarko Petroleum for $35.7 billion just before COVID-19 pandemic cratered oil demand. It paid down almost $5 billion in debt and achieved its internal deleveraging goal, opening the door for a $3 billion share repurchase program to begin.
Occidental repurchased $1.1 billion through Aug. 1, it said.
The U.S. producer said Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) has now a 19.5% stake in Occidental, below the threshold where it could record some of the oil company’s earnings with its own.
If it reached 20% ownership, Berkshire could potentially report its proportionate share of Houston-based Occidental’s earnings through the so-called equity method of accounting, potentially adding billions of dollars to annual profit.
The company’s share price has more than doubled this year to $65.06 on Tuesday, with the company benefiting from rising oil prices following Russia’s invasion of Ukraine.
The rally made some investment firms, including Goldman Sachs, in the past weeks downgrade the company recommendation, saying its potential for cash generation is already reflected in the price.
Source: Reuters (Reporting by Sabrina Valle in Houston and Ruhi Soni in Bengaluru; Editing by Maju Samuel and Marguerita Choy)