OXY: Reaping the Benefits of Higher Oil Prices

Thanks to the record-breaking price of oil, Occidental Petroleum Corp. (OXY) is trading near a 52-week high after delivering a solid first quarter. First-quarter earnings of $2.20 per share topped the year-prior 98 cents and beat the consensus estimate by 13.4%. Wall Street estimates are up. The company's ROE of 21% is above the industry average of 20%. On the income side, OXY pays an annual dividend of $1.00, which translates into a current yield of 1.2%.

Occidental Petroleum Corp. explores for, develops, produces and markets crude oil and natural gas and manufactures and markets a variety of basic chemicals, including chlorine, caustic soda, and ethylene dichloride, as well as specialty chemicals and vinyls, including polyvinyl chloride resins and vinyl chloride monomer. Occidental conducts its principal operations through its oil and gas and chemical subsidiaries.

The company continues to reap the benefits of soaring oil prices. It just posted a solid quarter and is trading very close to a 52-week high.

First-quarter earnings of $2.20 per share topped the year-prior 98 cents and beat the consensus estimate by 13.4%.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said:

Our net income for the first quarter of 2008 set a new company record, driven by an 8.4 percent increase in production over last year's first quarter, as well as improved oil and gas prices. These results continue our momentum from 2007, the most successful year in Oxy's history, and provide a strong start to propel us into the remainder of 2008.'

Wall Street estimates are up on the strong report. Of the 15 covering analysts, one analyst lifted last week's full-year 2008 earnings forecast of $7.28 per share to $7.39. During the past 30 trading days, eight analysts increased projections to $7.28 from $6.74. The most accurate estimate is more bullish at $7.80.

Occidental Petroleum earnings per share are expected to grow by 11% over the next 3 - 5 years, which is in line with the industry average. The company's ROE of 21% is above the industry average of 20%. OXY's net profit margin of 28.6% is dwarfs the industry average of 6.2%.

On the income side, Occidental Petroleum pays an annual dividend of $1.00, which translates into a current yield of 1.2%.