Occidental Reports Heavy Losses in Q4 as Company Works to Reduce Debts

By Thomas Price Tuesday, February 23, 2021

After a difficult year for crude oil, it comes as very little surprise that many companies in the oil and gas market had difficult years in 2020. Occidental Petroleum Corp. is by no means an exception, posting severe losses in its Q4 report as business fell in the final three months of the year. While the company did succeed in reducing its overall debt significantly, the worse-than-expected losses have not given investors much to be optimistic about, pushing the share prices for the company down in pre-market trading.

An oil pump.

Occidental’s Earnings vs. Expectations

In Occidental’s Q4 report, the company posted a total revenue of $3.35 billion, significantly down from the same quarter in 2019, where the company had earned $7.14 billion. Most analysts had predicted markedly higher figures for the company at around $4.32 billion, disappointing many investors. The significant drop in business resulted in worse than expected losses as the company reported a quarterly loss of $1.31 billion, slightly less than the same quarter in 2019.

Adjusted losses per share were also a major source of disappointment as the $0.78 per share in losses was a wide margin larger than Wall Street projections of just $0.58 per share. All of these numbers add up to the business reporting six straight quarters of losses.

While business remained poor for Q4, the oil company did manage to make significant progress on cost and debt reduction. In fact, over the course of Q4, the business lowered its overall debt by an impressive $2.3 billion. The company still has a total debt of around $33.6 billion, but future business plans for 2021 will address that further.

Occidental’s Future Outlook and Stock Market Reaction

Following the release of the Q4 report, share prices for the oil company fell as the lack of profitable business ventures led to disappointment from investors. Occidental is currently down by over 2.5% in pre-market trading.

Occidental does have lofty plans for 2021 that should both alleviate debts and reduce costs in 2021. A large portion of these plans involves investing heavily into reaching a net-zero emissions target of 2050 to offset future costs and issues associated with climate change while also selling around $3 billion worth of properties that will go toward paying down their debt. The rising price of oil barrels should also help move the business in the right direction, especially as the output of oil for Occidental has stabilized at around 1.14 million barrels a day.

In a statement released with the Q4 report, President and CEO of Occidental, Vicki Hollub, said, “We continue to make progress on our debt structure and have significantly exceeded our cost savings targets while delivering operational excellence across our business. These decisive financial and operational actions reflect our leadership as a low-cost operator, positioning us for success when market conditions improve.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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