Occidental Petroleum (OP/A): Updating estimates - Goldman Sachs - February 07, 2006
We are updating our quarterly 2006 and full-year 2006 and 2007 EPS estimates for Occidental Petroleum. Our respective 1Q, 2Q, 3Q, and 4Q 2006 EPS estimates now stand at $3.02 ($3.29 before), $3.34 ($3.54 before), $3.35 ($3.62 before), and $3.29 ($3.30 before). Our full-year 2006 and 2007 EPS estimates are now $13.00 ($13.75 before) and $14.00 ($14.25 before). Our updated estimates reflect higher assumed international E&P tax rates, lower estimated chemical earnings, updated E&P production profile, and minor other adjustments. We have made no change to our normalized 2008-2010 EPS estimates. Oxy remains Outperform rated in the context of an Attractive coverage.
Oxy reported adjusted 4Q 2005 EPS of $2.79, slightly ahead of the $2.76 First Call consensus and our $2.78 forecast. The slight positive variance between reported results and our forecast was driven by lower-than-expected corporate charges, partially offset by lower-than-expected earnings from E&P. While E&P production volumes were 589,000 BOE/d, above our 584,000 BOE/d forecast, realized prices were weaker than expected.
For additional details on our views on Occidental Petroleum see our January 30, 2006 research note "E&P portfolio reloaded, relative valuation inexpensive, reinstating view with OP/A rating following a period of Not Rated" Message 22118708 , our November 1, 2005 research note "E&P portfolio positioned to resume multi-year growth at industry-leading ROCE" Message 21844140 , our October 14, 2005 research note "Oxy to acquire Vintage Petroleum" Message 21794600 , and our May 26, 2005 report, "Upgraded to OP given reloading of E&P portfolio" Message 21360559 .
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Arjun Murti, Luis Ahn. |
