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What's in Store for Occidental Petroleum (OXY) Q4 Earnings?

Zacks Equity Research

Occidental Petroleum Corporation OXY is set to report fourth-quarter 2018 earnings on Feb 12, after market close. In the third quarter, the oil and gas company delivered a positive earnings surprise of 17.2%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Occidental Petroleum expects fourth-quarter total production in the range of 690,000-709,000 barrels of oil equivalent per day (boe/d) and Permian Resources output within 240,000-250,000 boe/d. International production is expected in the range of 291,000-299,000 boe/d.

The Zacks Consensus Estimate for fourth-quarter Oil and NGL production from the Middle East region is pegged at 174,000 Boe/d, down 4.4% year over year. Oil and NGL production from the Latin America region is also expected to decline 4.7% from the prior-year quarter to 30,490 Boe/d. The expected decline in production from these regions will have a significant impact on overall production of the company.

While Occidental Petroleum is expected to come up with solid production from its Permian Resource assets, the softness in oil prices will not allow it to enjoy overall benefits from the production rise.

For the to-be-reported quarter, the consensus mark for earnings has declined 22.8% to $1.12 per share over the past 90 days, reflecting bearish analysts’ sentiments.

Occidental Petroleum Corporation Price and EPS Surprise

Occidental Petroleum Corporation Price and EPS Surprise | Occidental Petroleum Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that Occidental Petroleum is likely to beat estimates this earnings season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Earnings ESP: Occidental Petroleum has an Earnings ESP of +2.61%. This is because the Most Accurate Estimate is pegged at $1.15 per share while the Zacks Consensus Estimate stands at $1.12.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Occidental Petroleum currently carries a Zacks Rank #5 (Strong Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

One can consider the following players in the Zacks Oil and Energy sector with the right combination of elements to beat on earnings in the upcoming releases:

Marathon Oil Corporation MRO has an Earnings ESP of +2.36% and a Zacks Rank #3. It is expected to report fourth-quarter 2018 earnings on Feb 13. You can see the complete list of today’s Zacks #1 Rank stocks here.

Devon Energy Corporation DVN has an Earnings ESP of +0.20% and a Zacks Rank of 3. It is expected to report fourth-quarter 2018 earnings on Feb 19.

WPX Energy WPX has an Earnings ESP of +6.02% and is a Zacks #3 Ranked stock. The company is expected to report fourth-quarter 2018 earnings on Feb 21.

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