Warren Buffett's Favorite Energy Stock Is In Debt Reduction Mode. Earnings Up Next.

Buffett's Berkshire Hathaway cut its stake in Occidental Petroleum.

Warren Buffett's Berkshire Hathaway has been a major investor in Occidental Petroleum for several years. But in recent months, Berkshire has been reducing its stake in the company. In the first quarter of 2023, Berkshire sold about 91 million shares of Occidental Petroleum. This reduced its stake in the company from about 21% to about 18.7%. There are a few possible reasons why Berkshire Hathaway may be reducing its stake in Occidental Petroleum. One possibility is that Berkshire is simply taking profits. Occidental Petroleum's stock price has risen significantly in recent years, and Berkshire may be cashing in on some of its gains. Another possibility is that Berkshire is concerned about Occidental Petroleum's debt levels. Occidental Petroleum had about $38 billion in debt at the end of 2022. This is a significant amount of debt, and it could be a concern for Berkshire Hathaway, especially given the current economic environment. Whatever the reason for Berkshire Hathaway's decision to reduce its stake in Occidental Petroleum, it is worth noting that Buffett remains a big believer in the company. In a letter to Berkshire Hathaway shareholders in 2022, Buffett said that he believes Occidental Petroleum is "a very good company." He also said that he believes the company's CEO, Vicki Hollub, is "a terrific manager."

Occidental Petroleum is in debt reduction mode.

Occidental Petroleum has been working to reduce its debt in recent years. In 2022, the company reduced its debt by about $6 billion. Occidental Petroleum plans to continue to reduce its debt in 2023. The company has said that it plans to reduce its debt by $3 billion to $5 billion this year. Occidental Petroleum's debt reduction efforts are being helped by the company's strong cash flow. In 2022, Occidental Petroleum generated about $13 billion in cash flow from operations. This cash flow is being used to pay down debt and invest in new projects.

Occidental Petroleum's earnings are up.

Occidental Petroleum's earnings have been rising in recent quarters. In the first quarter of 2023, the company reported earnings per share of $1.61. This was up from $0.94 per share in the first quarter of 2022. Occidental Petroleum's earnings growth is being driven by higher oil and gas prices. Oil prices have risen significantly in recent months, and this has benefited Occidental Petroleum. The company is also benefiting from increased production. Occidental Petroleum's production increased by about 5% in the first quarter of 2023. Occidental Petroleum's earnings are expected to continue to grow in the coming quarters. The company is benefiting from higher oil and gas prices, and it is also increasing production. As a result, Occidental Petroleum is expected to report strong earnings in 2023.

Conclusion

Warren Buffett's Berkshire Hathaway has been reducing its stake in Occidental Petroleum in recent months. However, Buffett remains a big believer in the company. Occidental Petroleum is in debt reduction mode, and its earnings are up. As a result, Occidental Petroleum is expected to report strong earnings in 2023.