Occidental’s Profit Surges With Higher Crude Prices

Occidental Petroleum Corp. said Wednesday that soaring oil prices resulted in sharply higher first-quarter profit that beat forecasts and reversed last year’s losses.

The oil and gas company posted net income of $264 million, or 74 cents a share, excluding one-time items, up from a loss of $68 million, or 17 cents a share, in the year-earlier period. Industry analyst forecasts called for Occidental to post earnings of 63 cents, according to First Call/Thomson Financial, which tracks estimates.

Occidental, the first of the big oil companies to report earnings, benefited from the yearlong rally in crude oil prices, which peaked at more than $30 a barrel during the quarter before subsiding to around $25.

“Higher oil and gas prices and continuing cost control contributed to the record quarterly earnings for oil and gas,” said Ray Irani, chairman and chief executive.

Indeed, its oil and gas divisional earnings climbed to $394 million, or more than six times the $65 million it reported last year.

Meanwhile, the company said it closed its acquisition of Altura, an oil and gas partnership owned by BP Amoco and Shell, a unit of Anglo-Dutch Royal Dutch/ Shell. It paid $3.6 billion for the company, gaining 850 million barrels of proven oil equivalent.

The deal brings its total proven reserves to 2.2 billion barrels of oil and gas, primarily in the United States, Middle East and Latin America.

Another transaction, the purchase of about 30,000 barrels a day of production from a subsidiary of Atlantic Richfield Co., is expected to close in the second quarter, the company said.

Occidental said acquisitions will boost worldwide oil and gas production 47% from first-quarter figures.

Although soaring crude oil prices hurt its chemical business, creating higher raw material costs, the division’s earnings still managed to rise to $143 million from $12 million. The company said it was helped by higher sales volumes as well as higher prices for some of its chemicals.

Overall, sales for the Los Angeles-based company rose to $2.5 billion from $1.3 billion a year earlier.

Occidental’s shares closed up 31 cents at $20.44 on the New York Stock Exchange.

At a Glance

Other Southern California earnings, excluding one-time gains or charges unless noted:

* Dole Food Co. said first-quarter profit from continuing operations rose 21% to $36 million, or 65 cents a share, as revenue was flat at $1.2 billion. The company said cost-cutting boosted profit in its banana business.

* Kennedy-Wilson Inc. said its net income increased 44% to $1.68 million, or 17 cents a share, in the first quarter as revenue climbed 123% to $37.54 million.

* Strouds Inc. reported net income of $2.2 million, or 31 cents a share, up from $670,000, or 8 cents, a year ago as sales edged up to $59.8 million from $59.2 million.