Occidental Petroleum Earnings Preview: What Investors Are Watching, Including Debt Levels

Strong Oil Prices Point to Another Impressive Quarter

Occidental Petroleum is scheduled to report its third-quarter earnings on November 1, 2023. Analysts are expecting the company to post another strong quarter, driven by high oil prices.

Oil prices have been on a tear in recent months, buoyed by the war in Ukraine and the subsequent sanctions on Russian oil. This has benefited Occidental Petroleum, which is one of the largest oil producers in the United States.

In the second quarter, Occidental Petroleum reported a net income of $3.3 billion, up from $1.8 billion in the same quarter a year ago. The company's revenue also increased, from $7.6 billion to $10.7 billion.

Debt Levels Remain a Concern for Investors

While Occidental Petroleum is benefiting from high oil prices, investors are keeping a close eye on the company's debt levels. Occidental Petroleum has a significant amount of debt, which it took on to acquire Anadarko Petroleum in 2019.

The company's debt-to-equity ratio is currently around 50%, which is higher than the industry average. This means that Occidental Petroleum has more debt than equity, which can make it more vulnerable to economic downturns.

Investors will be looking for signs that Occidental Petroleum is taking steps to reduce its debt. The company has said that it plans to use its free cash flow to pay down debt, but it remains to be seen how quickly it can do so.

What to Expect from Occidental Petroleum's Earnings Report

Analysts are expecting Occidental Petroleum to report third-quarter earnings of $3.03 per share. This would be down from the $3.19 per share that the company reported in the second quarter, but it would still be a strong result.

Investors will also be looking for Occidental Petroleum to provide an update on its debt reduction plans. The company has said that it plans to reduce its debt-to-equity ratio to 30% by 2025, but it remains to be seen how quickly it can achieve this goal.

Overall, Occidental Petroleum is expected to report another strong quarter, but investors will be keeping a close eye on the company's debt levels.