Occidental earnings: third quarter 2026

The quarter in brief

Occidental, one of the largest US oil producers, had a strong third quarter next to a year ago. Sales were $6.6 billion, about 19% more than in the same quarter of 2025. The average price it received for its oil, $85.91 a barrel, was about a third higher.¹ Net income for common shareholders, the profit after everything, was $1.6 billion.¹

Next to an exceptional second quarter, though, it was a step back. Sales fell about 19% from that quarter, and the oil price it received fell 11%. Its pipeline and trading business earned far less.¹ Output was flat at about 1.43 million barrels of oil equivalent a day, a measure that counts gas alongside oil on a common scale. Meanwhile the cost of running its wells rose from $8.57 to $9.07 per barrel.¹

The cash kept coming. The business produced $4.1 billion of cash from its operations, more than twice its accounting profit of $1.8 billion.¹ Much of that gap is depreciation, an accounting charge for the wear on wells and equipment that uses no cash. Most of the money went to paying down debt.¹

The figures, as the company printed them

Against what analysts expected

Analysts expected earnings per share of $1.43 on average.² Earnings per share is net income divided by the number of shares. Occidental reported $1.61, about 13% more than that.¹ It also gives its own adjusted figure of $1.91, which leaves out losses on price-protection contracts and other one-off items.¹ The analysts' average sits much closer to the reported figure, so that is the one it is set against here. Both figures are well above a year ago and below the second quarter.¹

What the company expects

Its results release sets out no figures for the coming quarter or the year; the target it names looks years ahead.¹ It says it is advancing a plan to add more than $4.0 billion a year of lasting cash flow by 2030, and it ties that aim to returning more cash to shareholders.¹ It says the much stronger balance sheet left by this year's debt repayments supports the plan.¹

On the quarter just gone, it says production came in above the middle of the range it had said to expect. Income from pipelines and trading came in above the top of its range.¹ That second point matters for reading the weak side of the quarter. By the company's own account, the steep fall in that business from the second quarter was smaller than it had prepared for.

What it would take to reach the 2030 aim is cash that keeps arriving at something like this year's pace. The quarter itself shows how closely that cash follows the price of oil.

The strong points

The oil and gas business, which finds and pumps the crude and gas, earned about twice as much as in the same quarter last year.¹ Profit in the US operations more than doubled and did most of the work, and the international business also grew strongly.¹ This matters because oil and gas made almost all of the company's business profit this quarter. When the pipeline and trading side faltered, this is where the quarter was won.

Free cash flow, the cash left after running the business and investing in it, was $2.8 billion. That is nearly double a year ago, even though the company spent less on investment, $1.3 billion.¹ For Occidental this is the number that pays for everything it has promised: lower debt, a rising dividend and, in time, more for shareholders. The dividend is already up to $0.28 a share from $0.24 a year ago, and the company is buying back its own shares: $90 million worth in the quarter, $207 million so far this year.¹

Occidental repaid another $1.8 billion of debt in the quarter.¹ Its long-term debt is now $11.6 billion, against $20.6 billion at the end of 2025.¹ Part of this year's repayment came from selling a business, which brought in $9.5 billion in the first quarter.¹ Even so, a debt load cut by almost half leaves the company far less exposed if oil prices fall, and it frees cash that used to go on interest.

The weak points

The pipeline and trading business shrank badly. This is the part of Occidental that moves, processes and sells oil and gas. On the company's own adjusted measure, its income fell by about two-thirds from the second quarter, to $309 million from $961 million.¹ Before tax and on the reported figures, it earned just $55 million, against $1.3 billion in the second quarter. That included a $254 million loss on trading contracts.¹ This one business explains most of the drop in the company's profit from the second quarter.

Cash generation slipped from the second quarter as the oil price Occidental received fell from $96.78 to $85.91 a barrel.¹ Cash from operations, before changes in money tied up in day-to-day trading, fell to $4.1 billion, and free cash flow to $2.8 billion.¹ Both are still far above last year. But the slide shows how much of the company's plan for debt and shareholders rests on a price it does not control. The oil price contracts it uses as protection also cost it $187 million before tax this quarter.¹

Output in the Gulf of America, the company's US offshore fields, fell to 110 thousand barrels of oil equivalent a day from 144 thousand in the second quarter.¹ US oil output slipped too, to 594 thousand barrels a day. That is its lowest level in the last six quarters.¹ Total production held steady because the Al Hosn gas field in the Middle East recovered and the Permian grew. The company puts the Gulf drop down to a temporary curtailment: a third-party gas pipeline constraint and maintenance.

What to watch

The first signal is the oil price Occidental actually gets, which follows the market price for crude week by week, long before any results appear. In oil and gas, the step down from the second quarter came mainly from that lower price, the company says, not from producing less. So the price tells apart two readings of this quarter: a business earning less because oil got cheaper, or a business whose underlying earnings are weakening. If crude holds or rises and the company's cash still slides, the problem lies elsewhere.

The second is whether output in the Gulf of America recovers. Monthly production figures for the region's offshore fields come out ahead of the company's own reports. They would show early whether the drop from 144 to 110 thousand barrels a day was the temporary curtailment the company describes, a third-party gas pipeline constraint and maintenance, or the start of a lasting decline in its US offshore business. A quick rebound would point to the first. Several months at the lower level would point to the second.

The third is the pipeline and trading business, which earns from price gaps between regions and from its contracts. Those gaps are set in the market rather than by the company, so they shift before results are published. The next results will be the next check on whether its second quarter was the exception.

Our verdict on the quarter

In all, a strong report. Profit came in well above what analysts expected and far above a year ago. Oil and gas earned about twice as much as a year earlier. Free cash flow nearly doubled, and the company used it to cut its debt by almost half since the end of 2025. Against that, the quarter fell back from an exceptional second quarter as the oil price dropped and the pipeline and trading business shrank. US offshore output also slipped. For the future, its release names a long-term cash flow aim for 2030.

Notes

1. Occidental's results release, 9 November 2026: sec.gov. ↩
2. Nasdaq's earnings calendar, 9 November 2026. ↩