Advertisement
YOU ARE HERE: LAT HomeCollectionsBusiness

Occidental Petroleum posts higher profit, revenue

The oil company cites increased prices and record production in the first quarter. Exxon Mobil and Royal Dutch Shell report declines in net income.

April 27, 2012|By Ronald D. White, Los Angeles Times

Occidental Petroleum Corp. posted a slight increase in first-quarter profit on higher oil prices and record production as energy giants Exxon Mobil Corp. and Royal Dutch Shell reported lower net income.

Westwood-based Occidental, the fourth-largest U.S. oil company, said it generated net income of $1.56 billion in the first quarter, or $1.92 a share, up from $1.55 billion, or $1.90, in the same quarter of 2011. Revenue jumped to $6.27 billion from $5.73 billion a year earlier.

Occidental Chief Executive Stephen I. Chazen said production rose to the equivalent of 755,000 barrels of oil a day, "the highest in Occidental's history," from 730,000 barrels a day in the first quarter of 2011.

Quarterly earnings by Exxon Mobil . and Royal Dutch Shell highlighted an oddity in the oil patch: At a time of high oil prices, some oil companies are failing to match last year's performance. One reason was weak earnings for refineries. Another was the low price of natural gas, which is barely one-sixth of what it was in 2008.

"Occidental and the oil industry as a whole have benefited from higher oil prices in the first quarter," said Fadel Gheit, senior energy analyst for Oppenheimer & Co. "Oil companies with reserves that are highly leveraged toward oil compared to natural gas will do very well. Refining hasn't done so well."

Exxon Mobil saw its first-quarter profit fall to $9.45 billion from $10.7 billion a year earlier, missing Wall Street expectations. The company last saw a year-to-year quarterly profit drop in 2009. Exxon Mobil said it was hurt by lower production and weaker profits from its chemicals and U.S. refining businesses.

Royal Dutch Shell reported net income of $8.72 billion, down from $8.78 billion a year earlier. Excluding one-time charges, profit rose 16% to $7.3 billion.

Anticipating a backlash against oil industry earnings, John Felmy, chief economist for the American Petroleum Institute, said big oil profits were good news for Americans employed in the industry, and good news for Americans whose investments, often in retirement plans, include oil company holdings.

Critics such as the Center for American Progress aren't so sure.

"Big oil claims that high profits are fine because they benefit a broad section of America," said Daniel J. Weiss, a senior fellow at the center. "In fact, those profits help a few people a lot and they provide very little help to most people."

Occidental shares rose $1.79 to $91.90. Exxon fell 78 cents to $86.07 and Royal Dutch Shell increased $2.64 to $71.50.

ron.white@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|