Could Be Rough Day Tomorrow For OXY -- August 10, 2020

 OXY posts $6.6 billion charge after price crash, Bloomberg.

OXY shares up about a dollar today during normal trading hours, then dropped a dollar after hours. From the linked article:

Occidental Petroleum Corp. reported a $6.6 billion writedown in the second quarter, equivalent to more than 40% of its market value, as the collapse in energy prices took its toll on the debt-laden U.S. shale oil producer.

More than two-thirds of the impairment was to account for the lower value of its domestic onshore acreage, with the remainder in the Gulf of Mexico and overseas, the Houston-based company said Monday in a statement. The shares plunged as much 6.8% in after-market trading in New York.

Occidental is not alone is taking large impairments after the Covid-19 pandemic crushed demand for petroleum around the world, but its writedown is one of the biggest relative to its size. Though the charges don’t affect near-term cash flows, they increase certain leverage ratios, potentially pushing up borrowing costs for the oil producer.

Earnings report:

Excluding the writedowns, Occidental made an adjusted loss of $1.76 a share, worse than the average $1.68 estimated by analysts in a Bloomberg survey. 

Production came in at the high-end of Occidental’s guidance, at the equivalent of 1.41 million barrels of oil a day, boosted by output from the Permian Basin of Texas and New Mexico.

Earnings report from Zacks:

Occidental Petroleum came out with a quarterly loss of $1.76 per share versus the Zacks Consensus Estimate of a loss of $1.66. This compares to earnings of $0.97 per share a year ago. 

These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -6.02%. 

A quarter ago, it was expected that this oil and gas exploration and production company would post a loss of $0.50 per share when it actually produced a loss of $0.52, delivering a surprise of -4%. 

Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Occidental posted revenues of $2.98 billion for the quarter ended June 2020, missing the Zacks Consensus Estimate by 23.57%. This compares to year-ago revenues of $4.48 billion. The company has topped consensus revenue estimates three times over the last four quarters.