Oil Stocks: Buffett Favorite Occidental Sinks After Earnings, Amid Oil Sell-Off

Oil producer Occidental Petroleum (OXY) on Tuesday reported earnings per share that beat expectations, boosted by a spike in oil prices after Russia invaded Ukraine. But OXY stock fell after hours, after a mixed day for oil stocks.


The showing for the sector came amid broader concerns about the global economy and the impact on oil demand from China’s coronavirus lockdowns. U.S. crude oil prices fell 3.2% to $99.76 a barrel on Tuesday, back below $100, after tumbling 6.1% on Monday.

Elsewhere, Teekay Tankers (TNK) reports first-quarter results Thursday. Canada-based oil-sands producer Suncor (SU) reported first-quarter per-share profits late Monday that beat expectations.

Occidental Petroleum Earnings

Occidental earned $2.12 per share. That was above expectations for $1.97 per share.

OXY stock edged 0.7% lower after hours in the stock market today. The stock is trading near its rising 50-day line.

Like other oil stocks, its ratings from IBD are strong. Shares have a 99 Composite Rating. Their EPS Rating was 74.

Occidental is the largest acreage holder in the Permian Basin, located in Texas and New Mexico. It also has operations in the Gulf of Mexico, Colorado and abroad — in Oman, Algeria and the United Arab Emirates.

Shareholders of Occidental on Friday voted against a proposal by investor group Follow This for the oil company to set carbon-emissions reduction targets, according to Bloomberg. Occidental that same day said its board had declared a regular quarterly dividend of 13 cents per share.

Warren Buffett’s Berkshire Hathaway (BRKB) has amassed a major stake in OXY stock in recent months, becoming the the company’s largest shareholder. Berkshire owns 15.2% of Occidental’s shares, according to FactSet data.

Teekay Tankers Earnings

Estimates: Wall Street expects Teekay to report a loss of 76 cents per share, narrower than a year ago. Sales estimates were unavailable.

Results: Due before the open on Thursday.

Shares finished 3.8% higher Tuesday, back around their 50-day line, after tumbling 12.5% on Monday.

Teekay operates tankers that transport crude oil. The stock’s Composite Rating is 84. Its EPS Rating is 27

Suncor Earnings, Suncor Stock

Suncor’s earnings per share soared 291% to $1.93, according to FactSet. That was well above expectations for $1.27 per share.

The company increased its quarterly dividend by 12%, to 47 cents. Suncor said it trimmed long-term debt by $728 million during the quarter.

Suncor stock was unchanged after hours. Earlier in the day, it fell 1.4% to 34.34, but found support at the 50-day line. Shares have a 99 Composite Rating. Their EPS Rating is 74.

Among other oil stocks, Exxon (XOM) edged up 0.7% during the regular session, and was largely unchanged after hours. On Monday, the stock tumbled 7.9% to 84.46, below an 89.90 buy point.

Chevron (CVX) ticked 0.5% higher after hours on Tuesday. But that modest advance came after Monday’s 6.7% retreat to below its 50-day moving average. Shares were in a flat base with a 174.86 buy point. Berkshire has also substantially increased its CVX stock holdings in the past few months.

Russia’s invasion has sent oil prices higher, as buyers turn away from the nation’s supply and as markets worry about shipping disruptions.

Suncor, a major producer in Canada’s oil industry, uses mining and heating technology to extract oil sands — and bitumen, the thick form of crude oil those sands contain — from the ground. Along with bitumen, oil sand contains sand, clay and water. Once Suncor extracts bitumen, its refineries convert it into products like gasoline, asphalt and other materials.

Elliott Buys Suncor Stock

Elliott Investment Management last month said it had taken a roughly 3.4% stake in Suncor. At that time, it also said it sent a letter to Suncor’s board saying the company had “seen a decline in the exceptional performance that was formerly its hallmark” that had led to “missed production goals, high costs, and safety failures.” Elliott also argued that Suncor stock had underperformed many of its rivals.

Elliott called on Suncor to add five new independent directors with “deep expertise” in Canadian energy. And it called for a review of Suncor’s executive team, as well as a review of ways to strengthen business outside of Suncor’s oil-sands operations.

It also asked Suncor to increase capital returns to more than 80% of discretionary cash flow, after capital expenses and dividends. That would be up from 50%.

Suncor, in a brief statement, said it “looks forward to engaging with Elliott in due course to better understand their perspective.”

Elliott said that since 2014, 12 employees or contractors at Suncor had died in accidents. It said that figure was greater than its direct peers combined. Regulators and activists have also scrutinized the environmental impact of Suncor’s operations.


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William Murphy

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