Occidental Petroleum Corp. rode a wave of higher oil prices to a second-quarter profit of $1.82 billion, up 71% from the same period last year, the company said Tuesday.
The Westwood oil exploration and production company was among the first in the industry to announce quarterly results, which included earnings per share of $2.23, compared with $1.31 a year earlier. The results beat Wall Street expectations of $2.17 a share, according to a survey of analysts by Thomson Reuters.
For The Record
Los Angeles Times Thursday, July 28, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 34 words Type of Material: Correction
Occidental Petroleum: An article in the July 27 Business section about Occidental Petroleum Corp.'s second-quarter earnings gave an incorrect name for the company's chief financial officer. He is James M. Lienert, not Jim Leonard.
Occidental's revenue for the quarter was $6.17 billion, up 34% from $4.6 billion a year earlier.
Analysts said it would probably be the oil industry's biggest second quarter since 2008, when oil and fuel prices hit record highs.
Fadel Gheit, senior energy analyst for Oppenheimer & Co., said he was expecting the world's major integrated oil companies, as a group, to show a 39% gain in second-quarter profits this week.
"The earnings improvements from a year ago reflect higher oil prices of 32% for West Texas Intermediate crude and 50% for Brent North Sea crude," Gheit said. West Texas Intermediate is the U.S. benchmark grade of crude oil traded on the New York Mercantile Exchange. Brent North Sea crude is the European trading equivalent.
Some analysts had been expecting Occidental to show a production decline for the quarter, based on losses from unrest in the Middle East, but the company's newest domestic assets were paying off.
Occidental's daily oil and gas production volumes averaged 715,000 barrels in the second quarter, compared with 701,000 barrels a year earlier. Most of the gains came from a 42,000-barrel-a-day increase in the U.S., mainly from acquisitions in South Texas and North Dakota, the company said.
Occidental's chemical segment earned $253 million, compared with $108 million in the second quarter of 2010.
"The second-quarter results, one of the highest ever reported for the chemical segment, reflected higher margins and volumes across most product lines," Chief Financial Officer Jim Leonard said.
On Tuesday, oil giant BP announced a second-quarter profit of $5.6 billion. That compared with a loss of $17.2 billion a year earlier from the disastrous Macondo well explosion and leak in the Gulf of Mexico, the worst offshore oil spill in U.S. history. Still, analysts considered the earnings a disappointment.
"BP earnings were 14% below consensus on lower-than-expected production and higher costs," Gheit said.
Valero Energy Corp., the nation's biggest refiner, saw a second-quarter profit increase of 28% to $744 million, or $1.30 a share, from $583 million, or $1.03 a share, in the year-earlier quarter, but it also missed expectations. That was largely because of outages at refineries. Analysts had expected a profit of $1.44 a share, according to Thomson Reuters.
Shares of all three energy companies traded lower Tuesday, with Occidental falling $2.54 to close at $104.83, BP dropping 59 cents to $46.18 and Valero slipping 20 cents to $26.48.