To The Moon

$Occidental(OXY)$ is scheduled to report its Q1 2025 earnings (for the quarter ending 31 March 2025) on Wednesday, 07 May 2025, after the market closes.

Revenue: Wall Street anticipates revenue to be around $6.90 billion to $7.15 billion. This would mark a significant increase from the $6.01 billion reported in Q1 2024.

Earnings Per Share (EPS): The consensus estimate among analysts is for an Earnings Per Share (EPS) of approximately $0.71 to $0.73. This represents a year-over-year increase compared to the $0.65 EPS reported in Q1 2024. Forecasts range from $0.37 to $0.90 per share.

Estimate Revisions: While the consensus Q1 EPS estimate has seen a slight increase recently, the full-year 2025 EPS forecast has faced downward revisions over the past month.

Occidental Petroleum (OXY) Last Positive Earnings Saw Share Price Decline By 16.42%

OXY had a positive earnings call on 18 Feb 2025 which saw its share price dropped by 16.42% since.

Occidental demonstrated strong performance with record production, successful debt reduction, and significant cash flow generation. Strategic advancements in carbon management and reserve replacement further highlight the company's strengths. However, challenges such as environmental liabilities, weather impacts on production, and expected declines in midstream earnings present concerns. Overall, positive achievements outweigh the challenges.

Occidental Petroleum (OXY) Guidance

During the Occidental Petroleum Corporation's Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the upcoming year. The company plans to invest between $7 billion and $7.2 billion in its energy and chemicals business for 2025, with a focus on short-cycle, high-return assets. Full-year production is expected to average 1.42 million barrels of oil equivalent (BOE) per day, representing mid-single-digit growth from 2024. The company aims to maintain strategic priorities such as debt reduction, with $1.2 billion in divestiture proceeds allocated for this purpose. Additionally, Occidental plans to increase its common dividend by 9%.

Its OxyChem business is projected to generate over $1 billion in pre-tax income, while the midstream segment is expected to benefit from revised crude transportation contracts. The company also highlighted operational efficiencies, reporting a 9% reduction in lease operating expenses per barrel and a 12% decrease in bulk costs.

On April 9, 2025, OXY provided "Earnings Considerations," highlighting factors expected to impact Q1 results. This included preliminary average realized prices: Worldwide Oil: $71.07 per barrel Worldwide NGLs: $25.94 per barrel Worldwide Natural Gas: $2.30 per Mcf.

Average diluted shares outstanding for Q1 were reported as 982.9 million.

Key Factors To Watch For Occidental Petroleum (OXY) Earnings

Occidental achieved the highest annual US oil production and record total production of 1.33 million BOE per day in 2024, exceeding the upper end of full-year guidance.

In 2024, Occidental generated $4.9 billion of free cash flow, enabling $800 million in common dividends.

Anticipated Performance & Key Metrics

Production: Analysts project worldwide production to be significantly higher year-over-year, estimated around 1,395 thousand barrels of oil equivalent per day (MBOE/d), compared to 1,172 MBOE/d in Q1 2024. This includes higher oil and natural gas volumes.

An increase in long-term environmental remediation liability was announced due to a recent unfavorable federal court ruling, resulting in a reported loss of $0.32 per diluted share.

Lower production volumes from domestic offshore and international assets were reported due to weather events and PSE-related impacts.

Segment Sales: Estimates suggest strong year-over-year growth in Oil & Gas net sales (+16.3% estimated), moderate growth in Chemical sales (+4.5% estimated), and very strong growth in Midstream & Marketing (+334.2% estimated).

Midstream earnings are expected to be lower in 2025 due to reduced gas transportation optimization opportunities and lower distribution from asset sales.

OxyChem's first-quarter income is expected to be lower due to winter storm impacts, an unplanned outage, and increased raw material costs.

Market Context & Recent News

Debt & Shareholder Returns: The company achieved debt reduction targets ahead of schedule in 2024 and plans to increase its dividend by 9%.

The company achieved its near-term debt repayment target of $4.5 billion seven months ahead of schedule, demonstrating strong financial management.

Strategic Moves: Recent developments include EPA permit approvals for its Direct Air Capture (DAC) facility, the CrownRock acquisition integration, and a temporary reduction in warrant exercise price.

Occidental increased its year-end proved reserve balance to 4.6 billion BOE, achieving a reserves replacement ratio of 230% for 2024.

The OxyChem segment exceeded original guidance, achieving over $1.1 billion in pre-tax income in 2024.

Strategic advancements in Direct Air Capture (DAC) technology, including foundational Carbon Dioxide Removal (CDR) agreements and US Department of Energy funding for the South Texas DAC hub.

Berkshire Hathaway: Warren Buffett's Berkshire Hathaway remains a major shareholder (~28-30%), which continues to be a point of interest for investors.

Occidental Petroleum (OXY) Price Target

Based on 23 analysts from Tiger Brokers offering 12 month price targets for Occidental Petroleum in the last 3 months. The average price target is $48.22 with a high forecast of $63.11 and a low forecast of $38.00. The average price target represents a 18.74% change from the last price of $40.61.

OXY's stock has faced pressure recently, declining over the past month and year, partly due to lower oil prices compared to previous highs and broader market volatility.

Technical Analysis - Exponential Moving Average (EMA)

Recent actions include a downgrade from TD Cowen (Buy to Hold) and a revised outlook from Fitch (Stable to Positive).

We can see that investors are playing a wait-and-see attitude as seen from the RSI, there is some resistance for OXY to clear the 26-EMA level, and sideways trading have been observed. This is because of the recent oil prices fluctuations.

What investors might be feeling confident is the position that Warren Buffett's Berkshire Hathaway remains a major shareholder (~28-30%), we could see some investors trying to load up before the quarterly earnings on 07 May, if oil prices improve at start of next week.

We are not seeing an increased in short interest which means investors are not doing any selling off for profit taking or losing confidence, this might be a good news for investors looking to get into OXY.

Summary

We are seeing analysts giving expectations point towards significant year-over-year growth in revenue and production for Q1 2025, alongside a modest increase in EPS compared to Q1 2024.

But we are also seeing analyst estimates for the full year have moderated, and the stock has experienced recent weakness. The actual results on 07 May will provide clarity on OXY's performance and outlook.

I think as investors, we might want to look at the macros trend surrounding the oil prices and also how OXY performance and guidance would turned out.

Appreciate if you could share your thoughts in the comment section whether you think OXY guidance would be able to shed some lights on how the energy sector and oil prices would be moving next week.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.