Before getting into the discussion of energy and chemical company Occidental's
Covering as many energy companies as I do, ranging in size from ExxonMobil
With that out of the way, Occidental had a difficult quarter but a solid one. I wish that the company included more operating information in its financial press releases, but that doesn't change the fact that revenue was up 36% or that core earnings rose more than 50% this quarter. As has been the case for a while now, oil and gas continue to be strong performers, with high realizations (prices) and rising production (up 18% this time around).
Of course, even though Occidental has competitive finding and developing costs and a good global production platform, that's not the most interesting piece of recent news. Rather, this company suffered the wrath of the Ecuadorian government and had a productive asset seized. In response, the company has taken a charge to account for the lost value, but management still seems optimistic that it will someday recover that asset.
In the meantime, Occidental is one of those energy companies that I like well enough as a company, but current valuations aren't quite as enticing on a relative basis. It's not a bad idea to hold, but investors looking to put new money into oil and gas can probably find a better value if they shop around a bit.
For more Foolish thoughts on the energy sector:
- What More Can Occidental Petroleum Do?
- Does ExxonMobil Mark the Spot?
- Apache Continues to Pump Out Value
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).