Occidental’s Net Income Falls 9.5%

Los Angeles-based Occidental Petroleum Corp. saw its third-quarter earnings fall 9.5% as natural gas prices in California relaxed from the energy-crisis induced spikes experienced last year.

The oil and natural gas producer and chemical maker said third-quarter net income fell to $402 million, or $1.07 per share, from $444 million, or $1.19, a year earlier.

Earnings had dropped in the year’s first two quarters and continued the slide this period.

“The decline in domestic natural-gas prices in the third quarter of 2002, due to the absence of the unusual California gas market experienced last year, reduced earnings,” the company said in a statement.

Revenue dipped 1% to $1.96 billion, down from $1.98 billion.

Third-quarter profit from energy production fell 8.5% to $483 million, compared with a year ago, Occidental said.

Accounting for the difference was California, where higher prices lingered last year after an energy crisis that led to blackouts in some parts of the state, the company said.

Natural gas is used to fuel many California power plants.

Although net income took another dip, several analysts said Wall Street was more focused on earnings before special items and discontinued operations, which were $329 million (or 87 cents per share), compared with $316 million (or 85 cents per share) for the third quarter of 2001, the company said.

That beat the consensus of 76 cents per share, analysts said.

Occidental shares rose 13 cents to close at $30.58 on the New York Stock Exchange.

And though oil and gas earnings dipped, profit from the firm’s chemical segment was up nearly 130% compared with last year, said Michael Young, senior oil analyst with Gerard, Klauer Mattison.

“While oil and gas profits declined modestly on lower U.S. natural gas prices, chemical profits were up sharply year over year,” Young said, calling it a “strong quarter” for the firm.