Occidental Petroleum says first-quarter profit fell 13%
Los Angeles-based Occidental Petroleum, one of the largest crude oil producers in the country, said its first-quarter profit fell but beat expectations as the company tried to cut costs and manage lower prices for natural gas.
The earnings report comes just a week before its annual shareholder meeting, where a vote is expected to determine whether to oust its longtime chairman, Ray Irani.
The company said that profit fell to $1.36 billion, or $1.68 a share, in the three months ended March 31. That was a 13% drop from the $1.56 billion, or $1.92 a share, from the same quarter a year ago.
Sales fell 6% to $5.87 billion. A decline in international sales volumes was partly due to maintenance and production contracts in the Middle East and North Africa, the company said.
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Occidental said it had boosted domestic output to 478,000 barrels a day, a record for the 10th consecutive quarter, and has shaved drilling costs by 19% compared with a year earlier.
“We executed well in the first quarter and to date are running ahead of our full-year objectives in our program to improve domestic operational and capital efficiencies,” Occidental Chief Executive Stephen Chazen said in a statement.
Chazen is part of the boardroom intrigue that was set off in February when the company announced it was looking for a successor to the chief executive. That sparked speculation that the CEO search was a power play by Irani to push out Chazen.
The ensuring rumors prompted Occidental to take the unusual step of issuing a statement this month denouncing the “inaccurate speculation” and saying there was “no fight at the top” involving senior management. But the energy company said both men were on their way out in one way or another.
Investors including the California State Teachers’ Retirement System and First Pacific Advisors have publicly expressed support for Chazen. Several investors said Irani should leave the company instead.
Proxy advisors Glass Lewis & Co. and Institutional Shareholder Services recommended that shareholders vote against reelecting Irani to the board when they meet May 3.
Irani, for his part, has already said he plans to retire at the end of 2014. If the votes do not go his way at the meeting, Occidental said in company filings that the chairman and former chief executive would tender his resignation. It has yet to announce a date for replacing Chazen.
Shares of Occidental fell 7 cents, or 0.08%, to $84.26 in midday trading Thursday.
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