Occidental misses first-quarter earnings estimates after Anadarko deal
HOUSTON (Reuters) - Occidental Petroleum Corp on Monday missed earnings estimates in its first results after closing its $38 billion (£29.46 billion) purchase of rival Anadarko Petroleum, and said it would slash spending on big projects by 40% next year. Occidental, which is battling pressure from activist investor Carl Icahn to accelerate asset sales to pay off debt, reported a third-quarter net loss of $912 million (£706.98 million) after a year-ago profit of $1.87 billion.
HOUSTON (Reuters) - Occidental Petroleum Corp
Occidental, which is battling pressure from activist investor Carl Icahn to accelerate asset sales to pay off debt, reported a third-quarter net loss of $912 million (£706.98 million) after a year-ago profit of $1.87 billion. The loss included nearly $1.3 billion in pretax acquisition costs and impairment charges.
"We remain committed to the strategy we laid out to our investors, which focuses on deleveraging and returning excess free cash flow to shareholders," Chief Executive Vicki Hollub said in a statement.
Its spending on new projects next year will fall to $5.3 billion to $5.5 billion, down from a $9 billion budget this year. In the Permian Basin, the top U.S. shale field, spending will drop by half to $2.2 billion, and by a third in Colorado's shale fields.
The company is expected to hold a briefing on Tuesday to discuss its results.
Occidental topped its production forecast, delivering 1.16 million barrels of oil and gas. However, its crude sold for $56.26 a barrel on average, down more than $6 a barrel a year ago.
Profits in its Oxychem chemicals business and midstream and marketing unit both fell sharply. Oxychem pretax income fell 36% to $207 million from the year-ago quarter. Midstream and marketing posted pretax profits of $266 million, down from $1.7 billion a year ago, which was boosted by an asset sale.
Earnings from Occidental's holdings in pipeline operator Western Midstream Partners was $134 million.
The Houston-based company's adjusted earnings fell to $93 million, or 11 cents per share, from $1.36 billion, or $1.77 per share, a year earlier. Analysts were expecting earnings of 37 cents a share by the same measure, according to Refinitiv. (https://bit.ly/2oM6RUh)
(Reporting by Arunima Kumar in Bengaluru and Jennifer Hiller in Houston; Editing by Sriraj Kalluvila and Richard Chang)
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