Occidental Petroleum second quarter 2026 earnings explained: segments, adjusted EPS and debt

Occidental Petroleum reported its second quarter 2026 results on August 5, 2026. That is still its latest quarter with full results. The company had not published its third quarter results when this article was written on October 31, 2026. On October 13 it filed only a short preliminary summary of items that will affect the third quarter, which we cover near the end. Those full results are the next report to watch. ^[1][2][3]

In the three months ended June 30, 2026 Occidental reported net income attributable to common stockholders of $2.8 billion, or $2.75 per diluted share. Its adjusted income was $2.4 billion, or $2.40 per share from continuing operations. Occidental says net sales rose primarily because of higher crude oil prices and higher marketing margins. This article explains how the company is now organised and what each segment earned. It then covers production, cash flow and debt before turning to valuation. Every figure is sourced and dated, and every number worked out by us is labelled as a Dalsna Finance calculation. ^[1][4]

Occidental in brief

Occidental is an international energy company based in Houston that produces, markets and transports oil and natural gas, as it describes itself. It operates mainly in the United States, the Middle East and North Africa, and its shares trade on the New York Stock Exchange under the ticker OXY. Richard Jackson is its president and chief executive. In the release he said, "Our second quarter results demonstrate the strength of Oxy's resources and the competitive advantages that position us for continued value creation." That is the company's own view. ^[1]

Occidental now reports two segments. Oil and gas explores for, develops and produces oil and condensate, natural gas liquids (NGL) and natural gas. Midstream and marketing buys, markets, gathers, processes, transports and stores oil, NGL, natural gas, carbon dioxide and power. It also holds investments in similar businesses, including WES, and it includes the company's low carbon ventures businesses. ^[4]

There is no longer a chemical segment. Occidental sold OxyChem, its chemical business, to Berkshire Hathaway in an all cash deal that closed on January 2, 2026, for an adjusted sales price of $9.5 billion, subject to additional post closing adjustments. The sale produced a gain of about $3.1 billion, net of taxes, which is why first quarter net income was so high. OxyChem's results now appear as discontinued operations for every period shown, so the earlier quarters below are on the same basis. Berkshire Hathaway has post closing indemnification rights in connection with the sale, according to the quarterly report. ^[4][1]

What each segment earned

Occidental reports each segment's results as income before tax. Oil and gas earned $2,849 million in the second quarter against $1,017 million in the first. The quarterly report puts the rise primarily down to higher crude oil and NGL prices and gains on derivatives, partially offset by lower prices for domestic gas. Average worldwide realized crude oil prices rose 38% from the first quarter to $96.78 a barrel, as reported. ^[4][1]

Midstream and marketing swung from a loss of $87 million to income of $1,338 million. Excluding items affecting comparability, the quarterly report puts the improvement primarily down to higher crude margins from the timing of crude marketing, the lag between buying crude and selling it, and higher gas margins from transportation capacity optimizations. Occidental also booked a gain of $220 million in the second quarter when Occidental's share of WES was reduced pro rata after an acquisition made by WES. ^[4]

Occidental also reports adjusted segment income, which leaves out items it says vary widely and unpredictably in nature, timing and amount and which it notes may recur. They include derivative gains and losses, gains and losses on asset sales and impairments. On that basis oil and gas rose to $2,759 million from $1,386 million and midstream and marketing to $961 million from $591 million. The company says midstream and marketing results exceeded the high end of its guidance. ^[1]

The numbers, quarter over quarter

Net sales, Occidental's term for revenue, rose to $8,065 million from $5,230 million. The quarterly report puts the rise primarily down to higher crude prices and higher marketing margins, which came from the timing of crude sales and from making better use of gas transport capacity in the Permian, partially offset by lower domestic gas prices. Income from continuing operations before taxes rose to $3,915 million from $390 million. ^[1][4]

Net income attributable to common stockholders fell to $2,807 million from $3,175 million, but only because the first quarter included the OxyChem gain. Discontinued operations added $3,123 million in the first quarter and took away $4 million in the second. Income from continuing operations attributable to common stockholders rose to $2,811 million from $52 million. Interest and debt expense fell to $108 million from $432 million, which the quarterly report links to premiums paid to retire debt early in the first quarter and to lower debt in the second. ^[1][4]

Adjusted income, Occidental's non GAAP measure, removes items affecting comparability. In the second quarter those items added $368 million after tax to continuing operations. They included derivative gains of $105 million in oil and gas and $178 million in midstream and marketing, and $199 million of gains on asset sales and other in midstream and marketing, all before tax. In the first quarter the items took away $1,018 million after tax, including derivative losses and a $237 million charge before tax for retiring debt early. Profit margin, profit divided by revenue, is shown below on both bases. ^[1]

Earnings per share

Earnings per share, or EPS, is profit divided by the number of shares. The diluted figure also counts shares that could be created from items such as stock awards. Occidental reported diluted EPS of $2.75 for the second quarter and $3.13 for the first. Simply dividing net income by diluted shares gives slightly more, $2.77 and $3.15 (Dalsna Finance calculation), because Occidental first deducts the income allocated to participating securities, $19 million in the second quarter for the diluted figure, according to its quarterly report. ^[1][4]

Occidental works out adjusted EPS from continuing operations by starting from reported EPS and taking off the per share effect of the items affecting comparability, including discontinued operations. That was $0.35 in the second quarter, giving $2.40, and $2.07 in the first, giving $1.06. The first quarter's adjustment is large because it removes the OxyChem gain. ^[1]

Production and prices

Production is measured in thousand barrels of oil equivalent per day (Mboed), which counts gas and NGL alongside oil on one scale. Worldwide production averaged 1,433 Mboed in the second quarter, against 1,426 Mboed in the first. Occidental says this exceeded the high end of its guidance, with its Permian and Gulf of America units outperforming. ^[1]

Prices moved far more than volumes. The average WTI and Brent benchmark prices were $92.79 and $97.06 a barrel in the second quarter. Occidental's realized NGL price rose 30% to $24.64 a barrel, as reported. Its average domestic realized gas price was below zero, at negative $1.48 per thousand cubic feet, against $1.01 in the first quarter. ^[1]

Cash flow and debt

Operating cash flow from continuing operations was $5,086 million in the second quarter, against $1,392 million in the first. Occidental also reports it before changes in working capital, the cash tied up in items such as receivables and payables: $4,610 million against $3,251 million. Free cash flow before working capital, which is that figure minus capital spending net of noncontrolling interest, was $3,021 million. The company says that is the highest level since the third quarter of 2022. ^[1]

Debt kept falling. In its second quarter highlights Occidental said it reduced principal debt by $1.9 billion to $11.8 billion, advancing toward what it calls the $10.0 billion milestone. Borrowings at face value were $11,818 million at June 30, 2026, against $20,427 million at December 31, 2025. In the first half of 2026 the company used after tax proceeds from the OxyChem sale and cash from operations to repay about $8.6 billion of debt. ^[1][4]

In August 2026 the board raised the quarterly dividend by 8% to $0.28 per share, payable on October 15, 2026 to shareholders of record on September 10, 2026. Occidental also paid $61 million for purchases of treasury stock in the second quarter, according to its cash flow statement. As of June 30, 2026 its debt was rated Baa3 by Moody's Investors Service, BBB by Fitch Ratings and BB+ by Standard and Poor's, according to the quarterly report. ^[4][1]

The last four quarters

Over the four quarters to June 30, 2026 net income attributable to common stockholders added up to $6,575 million and adjusted income to $4,200 million (Dalsna Finance calculation for the sums). GAAP net income includes OxyChem as discontinued operations, including the gain on its sale in the first quarter of 2026. Adjusted income covers continuing operations only. All four quarters are taken from the second quarter 2026 release, which shows the earlier quarters on that basis. ^[1]

What the market values Occidental at

Market capitalization, or market cap, is what the stock market values the whole company at: the share price times the number of shares. Occidental's shares closed at $64.00 on Friday, October 30, 2026, as reported by StockAnalysis. The cover of its second quarter report to the SEC lists 999,637,371 shares of common stock outstanding as of July 31, 2026. That gives a market cap of about $63.98 billion (Dalsna Finance calculation). Every multiple and share price below uses this one share count. ^[5][4]

The count is lower than the 1,012.2 million average diluted shares behind second quarter EPS. As of June 30, 2026 Occidental also had 17.9 million common stock warrants with a strike price of $22.00 per share and 83.9 million warrants held by Berkshire Hathaway with a strike price of $59.59, according to the quarterly report. Shares issued on exercise would raise the count. ^[4][1]

Six valuation multiples

The price to earnings ratio, or P/E, is market cap divided by a year of earnings. It shows how many dollars the market is paying for each dollar of yearly profit. Annualised means one quarter multiplied by four. Second quarter net income attributable to common stockholders of $2,807 million times 4 is $11,228 million, which gives an annualised P/E of 5.7. The adjusted P/E uses adjusted income instead: $2,443 million times 4 is $9,772 million, which gives 6.5 (Dalsna Finance calculation). ^[1][5][4]

A trailing P/E, sometimes called a historical P/E, uses the last four reported quarters. On the $6,575 million of net income in the table above it is 9.7, and on the $4,200 million of adjusted income it is 15.2 (Dalsna Finance calculation). The GAAP figure includes the gain of about $3.1 billion on the OxyChem sale, a one time gain from selling a business, so the trailing P/E looks lower than it would on continuing earnings alone. ^[1][4][5]

A forward P/E uses an estimate of future earnings. Occidental's release gives no earnings guidance. The most recent dated analyst estimate for 2026 we could reach, in a Barchart preview on Yahoo Finance published on January 19, 2026, came before either 2026 quarter was reported, and adjusted EPS for the first half alone has since come to $3.46. Because it no longer reflects reported results, we do not use it, so the two forward P/E values are not calculated. ^[6][1]

Two base cases: the second quarter held flat for a year

Suppose net sales stayed at the second quarter's level for a full year, with no growth and no decline: $8,065 million times 4, or $32,260 million. At the second quarter's GAAP net margin of 34.8% that gives $11,228 million of net income, or $11.23 per share on the cover share count. At the 30.3% adjusted margin it gives $9,772 million, or $9.78 per share (Dalsna Finance calculation). ^[1][4]

Both cases are simply the latest quarter annualised, so at the matching annualised P/E each returns the October 30, 2026 close of $64.00 by construction. The other cells only show how the price moves when the same earnings are given a different multiple. Each kind of earnings meets its own kind of multiple. Occidental reports no income from operations line, and its adjusted income already leaves out the items it quantified this quarter, so there is no separate operating margin case. The arithmetic also holds prices fixed: Occidental's realized oil price was $96.78 a barrel in the second quarter, against $85.91 in the preliminary third quarter estimates it filed on October 13. ^[1][5][2]

The adjusted base case in a chart

What the October 13 filing says about the third quarter

On October 13, 2026 Occidental filed a summary of factors that management believes will affect third quarter results. The company stresses that it is preliminary, is not comprehensive and is not an estimate of third quarter earnings. It says total production for the quarter is within its guidance range. That includes downtime in September, when it temporarily curtailed some Gulf of America production because of a third party gas pipeline constraint and maintenance. Production has been partly restored, the filing says. ^[2]

The filing estimates Gulf of America net sales volumes of 110 Mboed for the quarter (company estimate, as reported) and gives average diluted shares of 1,012.8 million. Crude oil collar settlements reduced operating cash flow before working capital by $94 million. The average worldwide realized oil price was $85.91 a barrel, against an average WTI price of $85.79. These are the company's own preliminary estimates. ^[2]

Sector comparison

This table sets the second quarter at Occidental beside seven other large US oil and gas companies, using each company's own reported figures for the three months ended June 30, 2026, though integrated companies, producers and refiners earn money in different ways, so margins are not like for like. Each P/E here divides the October 30, 2026 close by four times the quarter's diluted EPS, so it can differ a little from the market cap based P/E earlier in this article. ^[1][5]

What to watch

The full third quarter report will show how lower oil prices than in the second quarter and the Gulf of America downtime flowed through to segment income and cash flow. It will also show whether principal debt has moved from $11.8 billion toward the $10.0 billion milestone the company has named. ^[2][1]

One legal matter is worth following. Anadarko, which Occidental acquired, received an $881 million tentative tax refund in 2016 that the IRS later disallowed, and the case is before the U.S. Tax Court. As of its August 5 quarterly report the court could rule at any time. If the company does not ultimately prevail, it says it would have to repay about $1.4 billion of taxes and $1.0 billion of accrued interest as of June 30, 2026. A liability for those amounts is already on its balance sheet. ^[4]

How these figures were made: inputs come from Occidental's second quarter 2026 earnings release and quarterly report and its October 13, 2026 filing on SEC EDGAR. The share price is the dated close named above. Calculations use the figures as filed and are rounded only at the end, with percentages and multiples to one decimal, per share figures and prices to the cent. ^[1][4][2][5]