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

Occidental Petroleum reported its third quarter 2026 results on November 9, 2026 and filed its quarterly report with the SEC the same day. In the three months ended September 30, 2026 net income attributable to common stockholders was $1,637 million, or $1.61 per diluted share, against $2,807 million, or $2.75, in the second quarter. Adjusted income, a non GAAP measure, was $1,951 million, or $1.91 per share from continuing operations, against $2,443 million, or $2.40. ^[1][2]

This quarter adjusted income was $314 million above net income. The release says the difference mainly reflects derivatives losses. In its highlights Occidental also says it reduced principal debt by $1.8 billion to reach its $10.0 billion milestone. This article compares the quarter with the quarter before it and with the same quarter a year earlier. Every figure is sourced and dated, and every number worked out by us is labelled as a Dalsna Finance calculation. A separate Dalsna Finance article covers the second quarter. ^[1]

Occidental in brief

Occidental describes itself as an international energy company that produces, markets and transports oil and natural gas. It is based in Houston and operates mainly in the United States, the Middle East and North Africa. 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 teams delivered another strong quarter, building on the operational and financial performance we have seen throughout 2026." That is the company's own view. ^[1]

Occidental 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 invests in businesses that do similar work, including WES, and it includes the company's low carbon ventures businesses, according to the quarterly report. ^[2]

There has been no chemical segment since Occidental sold OxyChem 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. OxyChem's results appear as discontinued operations for every period shown, so the earlier quarters below are on the same basis. ^[2]

What each segment earned

Occidental reports each segment's results as income before tax. Oil and gas earned $2,556 million in the third quarter against $2,849 million in the second. Excluding items affecting comparability, the quarterly report says the decrease was primarily driven by lower realized crude oil prices, partially offset by higher realized domestic natural gas prices. Average worldwide realized crude oil prices fell 11% from the second quarter to $85.91 a barrel, as reported in the release. ^[2][1]

Midstream and marketing earned $55 million against $1,338 million. Excluding items affecting comparability, the quarterly report says results decreased due to lower gas margins, as the gas price spread between Waha and the Gulf Coast narrowed, and lower crude margins related to the timing of crude sales, partially offset by higher sulfur volumes and prices at Al Hosn. The release says income from its equity method investment in WES was $121 million in the quarter. ^[2][1]

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. On that basis oil and gas fell to $2,666 million from $2,759 million and midstream and marketing to $309 million from $961 million. The company says midstream and marketing results on that basis exceeded the high end of its guidance. The largest items this quarter were derivative losses before tax of $187 million in oil and gas and $254 million in midstream and marketing. ^[1]

The numbers, quarter over quarter

Net sales, Occidental's term for revenue, fell to $6,567 million from $8,065 million. The quarterly report says this was primarily due to lower crude oil prices and lower marketing margins tied to the narrower Waha to Gulf Coast spread and the timing of crude sales, partially offset by higher realized domestic gas prices and by higher sulfur volumes and prices at Al Hosn. Income from continuing operations before taxes fell to $2,395 million from $3,915 million, and income tax expense to $554 million from $915 million, which the report puts primarily down to lower pretax income. ^[1][2]

Adjusted income, Occidental's non GAAP measure, removes items affecting comparability. In the third quarter those items took away $294 million after tax from continuing operations, and discontinued operations took away another $20 million. Before tax, the items included the two derivative losses above, $27 million of asset impairments and other charges and $48 million of legal reserves and other in corporate. They also included two gains: $120 million of income from a judicial deposit recovery in international oil and gas and $61 million from retiring debt early. In the second quarter the items added $368 million after tax to continuing operations. Profit margin, profit divided by revenue, is shown below on both bases. ^[1]

Interest and debt expense fell to $78 million from $108 million. The reported figure includes the $61 million gain on early debt retirement, which the adjusted figures remove, so Occidental's adjusted interest expense was $139 million against $155 million, as shown in its reconciliation. ^[1]

Against the third quarter of 2025

Against the same quarter a year earlier, net sales rose to $6,567 million from $5,519 million and net income attributable to common stockholders to $1,637 million from $661 million. Adjusted income rose to $1,951 million from $513 million. The average WTI benchmark price was $85.79 a barrel against $64.93, and Occidental's realized oil price was $85.91 against $64.78, as reported in the release. Worldwide production was lower, at 1,427 Mboed against 1,465 Mboed. ^[1]

The quarterly report explains the third quarter against the second, and the first nine months against the same months of 2025, but not the third quarter against the third quarter of 2025. For the nine months, it says net income excluding items affecting comparability rose primarily due to higher realized crude oil prices, higher marketing margins from gas transport capacity in the Permian, the timing of crude sales and lower long haul crude transport costs, higher sulfur prices at Al Hosn and lower interest expense due to reduced long term debt, partially offset by lower realized domestic gas prices. Those reasons cover nine months, not this quarter alone. ^[2]

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 $1.61 for the third quarter and $2.75 for the second. Simply dividing net income by diluted shares gives slightly more, $1.62 and $2.77 (Dalsna Finance calculation), because Occidental first deducts the income allocated to participating securities: $10 million in the third quarter and $19 million in the second, according to its quarterly reports. ^[1][2][3]

Occidental works out adjusted EPS from continuing operations by starting from reported EPS and removing the per share effect of the items affecting comparability, including discontinued operations. In the third quarter those items lowered reported EPS by $0.30, so adjusted EPS is $0.30 higher at $1.91. In the second quarter they raised it by $0.35, so adjusted EPS was $0.35 lower at $2.40. ^[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 1,427 Mboed in the third quarter, against 1,433 Mboed in the second. The release says this exceeded the midpoint of guidance, led by the Permian and Rockies business units, offsetting a temporary curtailment at certain Gulf of America facilities because of a third party gas pipeline constraint and maintenance. Gulf of America production fell to 110 Mboed from 144 Mboed, and international production rose to 224 Mboed from 205 Mboed. ^[1]

The average WTI and Brent benchmark prices were $85.79 and $91.62 a barrel, down from $92.79 and $97.06 in the second quarter. Occidental's realized NGL price was $24.63 a barrel, which the release describes as flat. Its average domestic realized gas price turned positive at $1.61 per thousand cubic feet, against negative $1.48 in the second quarter. The quarterly report says third quarter prices were affected in part by geopolitical risk premiums tied to conflicts and instability in the Middle East. ^[1][2]

Cash flow and debt

Operating cash flow from continuing operations was $4,128 million in the third quarter, against $5,086 million in the second. Occidental also reports it before changes in working capital, the cash tied up in items such as receivables and payables: $4,101 million against $4,610 million. Free cash flow before working capital, which is that figure minus capital spending net of noncontrolling interest of $1,322 million, was $2,779 million. ^[1]

In the release Jackson said, "We reached an important milestone in the third quarter, reducing principal debt to $10.0 billion after retiring $10.4 billion of debt since the beginning of this year." The quarterly report says outstanding debt fell from about $20.4 billion at December 31, 2025 to about $10.0 billion at September 30, 2026, and that annualized interest on that debt fell from about $1.24 billion to about $655 million. After the quarter ended Occidental used cash on hand to repay the remaining $33 million of its zero coupon notes due 2036. ^[1][2]

As of the filing date the company had no debt maturities due in 2026, $48 million in 2027, $14 million in 2028, $352 million in 2029 and $9.6 billion after that, according to the quarterly report. At September 30 nothing was borrowed under its revolving credit facility, which had $4.2 billion of borrowing capacity, and its debt was rated Baa3 by Moody's Investors Service, BBB by Fitch Ratings and BB+ by Standard and Poor's. Dividends per common share were $0.28 in the third quarter against $0.26 in the second, as reported in the release. ^[2][1]

The cash flow statement shows $90 million of treasury stock purchases in the quarter. The quarterly report says the 1,499,057 shares Occidental bought in the quarter, at an average price of $59.59, were purchases from the trustee of its defined contribution savings plan that are not part of a publicly announced plan or program. It lists $1,223 million as the value still available under the $3.0 billion repurchase authorization announced in February 2023. ^[1][2]

The last four quarters

Over the four quarters to September 30, 2026 net income attributable to common stockholders added up to $7,551 million and adjusted income to $5,638 million (Dalsna Finance calculation for the sums). GAAP net income includes OxyChem as discontinued operations, including the gain of about $3.1 billion on its sale in the first quarter of 2026. The fourth quarter of 2025 was a net loss of $68 million. Adjusted income covers continuing operations only. All four quarters are taken from the third quarter 2026 release. ^[1][2]

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 $55.81 on Monday, November 9, 2026, as reported by StockAnalysis. The cover of its third quarter report to the SEC lists 999,894,745 shares of common stock outstanding as of October 31, 2026. That gives a market cap of about $55.80 billion (Dalsna Finance calculation). Every multiple and share price below uses this one share count. ^[4][2]

The count is lower than the 1,012.8 million average diluted shares behind third quarter EPS. As of September 30, 2026 Occidental also had 16.5 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. ^[2][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, so it assumes the third quarter's conditions lasted a full year. Third quarter net income attributable to common stockholders of $1,637 million times 4 is $6,548 million, which gives an annualised P/E of 8.5. The adjusted P/E uses adjusted income instead: $1,951 million times 4 is $7,804 million, which gives 7.2 (Dalsna Finance calculation). ^[1][4][2]

A trailing P/E, sometimes called a historical P/E, uses the last four reported quarters. On the $7,551 million of net income in the table above it is 7.4, and on the $5,638 million of adjusted income it is 9.9 (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 is lower than it would be on continuing earnings alone. ^[1][2][4]

A forward P/E uses an estimate of future earnings. Occidental's release gives no earnings guidance, and the forward estimates we could find on data sites were undated and did not agree with each other, so we did not use them. The two forward P/E values are not calculated. ^[1]

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

Suppose net sales stayed at the third quarter's level for a full year, with no growth and no decline: $6,567 million times 4, or $26,268 million. At the third quarter's GAAP net margin of 24.9% that gives $6,548 million of net income, or $6.55 per share on the cover share count. At the 29.7% adjusted margin, which leaves out the derivative losses and the other items Occidental quantified, it gives $7,804 million, or $7.80 per share (Dalsna Finance calculation). ^[1][2]

Both cases are simply the latest quarter annualised, so at the matching annualised P/E each returns the November 9, 2026 close of $55.81 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. The arithmetic also holds prices fixed at third quarter levels, such as the realized oil price of $85.91 a barrel. ^[1][4]

There is no separate operating margin case. Occidental's statement of operations has no income from operations line, and its adjusted income already leaves out the items it quantified this quarter, including the derivative losses. ^[1]

The adjusted base case in a chart

What management said

Occidental's release gives no revenue or earnings outlook, and we found no dated public transcript of a call on these results that we could check, so this article has no management revenue scenarios. In the release Jackson says that with a stronger balance sheet the company is advancing its plan to add more than $4.0 billion in annual sustainable cash flow by 2030. That is a company projection of cash flow, not of revenue, so it is not used in the arithmetic above. ^[1]

What analysts expect

Dalsna Finance tracks the price targets that research firms publish and links each one to the news report it came from. A price target is the share price an analyst expects a stock to reach, usually about a year out. As of November 9, 2026 our site records two current calls on Occidental, one each from Goldman Sachs and BMO Capital Markets, and both were published before the third quarter results. These are the analysts' targets, not Dalsna Finance's, and two calls are not a full Wall Street consensus. ^[5][6]

Investing.com reported on October 1, 2026 that Goldman Sachs upgraded Occidental to Buy from Neutral and raised its price target to $69 from $63. Its headline ties the upgrade to a debt reduction outlook. On October 14, 2026 Investing.com reported that BMO Capital Markets reiterated a Market Perform rating with a price target of $68. That report does not give an earlier BMO target. Across the two calls the average target is $68.50 (Dalsna Finance calculation: $69 plus $68 is $137, and $137 divided by 2 is $68.50). The highest is $69 and the lowest is $68. Each firm name in the table opens that firm's record of tracked targets on Dalsna Finance. ^[5][6]

Against the October 13 summary

On October 13, 2026 Occidental filed a preliminary summary of factors that management believed would affect third quarter results, which it said was not an estimate of third quarter earnings. It estimated Gulf of America net sales volumes of 110 Mboed and gave a worldwide realized oil price of $85.91 a barrel, average WTI and Brent prices of $85.79 and $91.62 and average diluted shares of 1,012.8 million. The release reports the same price and share figures. For the Gulf of America it gives production rather than sales volumes, also 110 Mboed. The October 13 filing also said crude oil collar settlements reduced third quarter operating cash flow before working capital by $94 million. ^[7][1]

What to watch

The fourth quarter report will show whether the Gulf of America volumes recover from the curtailment and how the smaller debt flows through to interest expense, with annualized interest on outstanding debt about $655 million at September 30, 2026, according to the quarterly report. ^[1][2]

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, which may issue an opinion at any time, according to the quarterly report. If the company does not ultimately prevail, it says it would have to repay about $1.4 billion of federal and state taxes and accrued interest of $1.1 billion as of September 30, 2026. A liability for those amounts is already on its balance sheet, and the company says it intends to begin making deposits with the IRS in the fourth quarter of 2026 to limit further interest. ^[2]

How these figures were made: inputs come from Occidental's third quarter 2026 earnings release and quarterly report, its second quarter 2026 quarterly report and its October 13, 2026 filing on SEC EDGAR, with analyst targets from the dated Investing.com reports named above. 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 and per share figures and prices to the cent. ^{[1][2][3][7][4][5][6]}