Oxy Posts Big Profit Jump, but Results Miss Forecasts

Occidental Petroleum Corp. on Friday posted a significantly higher second-quarter profit boosted by strong energy prices and one-time gains, but the results fell short of expectations.

Westwood-based Occidental also said it reached an accord to restart Libyan operations that it was forced to abandon in the mid-1980s, when U.S. sanctions were imposed. The company expects to receive formal approval from the Libyan government soon, Chief Executive Ray Irani said. The deal is expected to add 12,000 to 15,000 barrels a day to the production rate this year.

Occidental said second-quarter profit rose to $1.54 billion, or $3.82 a share, from $581 million, or $1.48, a year earlier. Sales increased 30% to $3.52 billion from $2.72 billion.

Occidental and other U.S. oil companies are benefiting from record oil prices as expanding economies in China and the U.S. push crude futures to new highs. The futures reached a record of $62.10 on July 7.

Excluding one-time items, however, Occidental’s per-share profit would have been $2.12. Analysts were expecting $2.25, according to Reuters Estimates. Lower-than-expected oil and gas production and higher-than-anticipated exploration costs were partly to blame for the profit missing forecasts, Lehman Bros. analyst Thomas Driscoll said.

The company’s net income reflects a $619-million tax benefit and an $89-million gain from the sale of 11 million shares of Lyondell Chemical Co.

Occidental said worldwide production for the first six months of the year was 560,000 barrels of oil equivalent per day, down from 571,000 a year earlier.

Shares of Occidental rose $1.28 to $81.65.

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Reuters and Bloomberg News were used in compiling this report.