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Occidental (OXY) to Report Q4 Earnings: What's in the Cards?

Zacks Equity Research

Occidental Petroleum Corporation OXY is set to report fourth-quarter 2019 earnings on Feb 27, after market close. In the last reported quarter, the oil and gas company delivered a negative earnings surprise of 73.2%.

Factors to Consider

Selling, general and administrative (SG&A), and other expenses are expected to have substantially increased year over year due to seasonally higher environmental remediation charges, which are likely to have had an adverse impact on fourth-quarter earnings. SG&A for the fourth quarter is expected to be $901 million, indicating a substantial increase from $473 million in the year-ago period.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $6.51 billion, which indicates growth of 35.7% from the year-ago reported figure. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 6 cents per share, which indicates a 104.9% decline from the year-ago quarter.

Q4 Expectation

During third-quarter earnings call, Occidental provided its guidance for fourth-quarter production within 1,312-1,336 thousand barrels of oil equivalent per day (MBoe/d) and Permian Resources output in the range of 449-459 MBoe/d. However, due to reduced downtime, strong base and new well performance, the company expects total output and Permian Resources production to be 1,402 MBoe/d and 476 MBoe/d, respectively.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Occidental this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Occidental Petroleum Corporation Price and EPS Surprise

Occidental Petroleum Corporation Price and EPS Surprise

Occidental Petroleum Corporation price-eps-surprise | Occidental Petroleum Corporation Quote

Earnings ESP: The company’s Earnings ESP is -23.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Zacks Rank: Occidental carries a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may consider from the same Oils & Energy sector as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Apache Corporation APA is slated to release fourth-quarter 2019 results on Feb 26. It has an Earnings ESP of +26.53% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Berry Petroleum Corporation BRY is set to release fourth-quarter 2019 results on Feb 26. It has an Earnings ESP of +2.50% and sports a Zacks Rank of 1.

California Resources Corporation CRC is scheduled to release fourth-quarter 2019 results on Feb 26. It has an Earnings ESP of +0.51% and a Zacks Rank of 2.

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