Occidental Petroleum Corp.'s NYSE: OXY) second-quarter earnings exceeded analyst expectations after Wednesday's close, but analysts still gave the oil and gas company a neutral outlook.
Occidental reported second-quarter revenue of $6.82 billion, which beat a Street consensus estimate of $6.80 billion, according to data from Benzinga Pro.
Quarterly earnings per share of $1.03 beat analysts' estimates of 77 cents per share.
"We rate Occidental Petroleum (OXY) Neutral due to its more levered balance sheet, the slowing of its chemicals business, its lower long-term production growth rate vs. peers, and its strategy of selling assets in a weaker environment," Roth Capital Partners analyst Leo Mariani wrote in a note.
But he also noted Occidental's Chemicals sector posted $296 million in pre-tax income, which was in line with its prior guidance of $300 million as the company beat analyst expectations.
Read Also: Occidental Sells Certain Delaware Basin Assets, Boosts Debt Reduction Efforts
He also pointed out its MidStream segment registered $49 million in pre-tax earnings, after excluding $67 million in one-time items and non-cash losses, which was $184 million higher than the midpoint of its previous guidance of $85 million to $185 million in pre-tax losses.
"Overall, we expect OXY to have a positive reaction vs. peers."
Scotiabank analyst Paul Cheng also acknowledged the earnings beat and assigned a Sector Outperform rating to the stock while noting the performance of the OxyChem and Upstream divisions was in line with Wall Street expectations.
"We think OXY's 2Q24 results will have a neutral impact on near-term share price performance," he wrote in a note.
"The bulk of the positive variance was driven by the significant Midstream beat."
Occidental is scheduled to have an earnings call with analysts at 12 p.m. E.T. on Thursday.
Price Action: Occidental gained 4.05% to $58.38 by Thursday's mid-day trading, while exchange-traded funds that track the stock also trended upward.
- Texas Capital Texas Oil Index ETF (NYSE:OILT) ticked up 0.72%
- First Trust Nasdaq Oil & Gas ETF (NASDAQ:FTXN) gained 2.01%
- Invesco S&P 500 Equal Weight Energy ETF (NYSE:RSPG) edged up 1.83%
- First Trust Natural Gas ETF (NYSE:FCG) went up 2.57%
- TCW Transform Systems ETF (NYSE:NETZ) improved 1.46%
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