Occidental Set to Release Q4 Earnings: Buy, Hold or Sell the Stock?

Occidental Petroleum Corporation OXY is expected to report a year-over-year decline in both top and bottom lines when it reports fourth-quarter 2025 results on Feb. 18, after market close.

The Zacks Consensus Estimate for revenues is pinned at $5.88 billion, indicating a decline of 13.96% from the year-ago reported figure. The consensus mark for earnings is pegged at 19 cents per share, indicating a year-over-year decline of 76.25%. The bottom-line estimate has gone down 44.12% over the past 60 days.

OXY’s Earnings Surprise History

Occidental Petroleum’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 27.8%.

What the Zacks Model Unveils

Our model does not predict a likely earnings beat for OXY this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.

Occidental Petroleum Corporation Price and EPS Surprise

Occidental Petroleum Corporation price-eps-surprise | Occidental Petroleum Corporation Quote

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: OXY has an Earnings ESP of -5.88%.

Zacks Rank: Occidental Petroleum currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Surprise by Others This Season

Some stocks from the same sector that have the combination of factors indicating an earnings beat are Cameco Corporation. CCJ, Sunrun RUN and South Bow Corporation SOBO. CCJ, RUN and SOBO have a Zacks Rank #2. CCJ, RUN and SOBO currently have an Earnings ESP of +2.35%, +87.34% and +2.99%, respectively.

Factors Likely to Have Shaped OXY’s Q4 Earnings

OXY’s fourth-quarter production volumes are expected to have remained strong due to continued strong performance across all three domestic assets. The strong domestic production is expected to have offset the impacts from a scheduled turnaround at Al Hosn.

Occidental Petroleum has been generating cash flow and utilizing the same to reduce debts, which is likely to have a positive impact on earnings. The company retired debts worth $8.1 billion, which lowered annual interest expenses by $440 million. This might have a positive impact on fourth-quarter earnings per share.

Midstream and Marketing segment is expected to have contributed to fourth-quarter performance due to gas marketing opportunities and stronger-than-anticipated sulfur pricing. 

Occidental Petroleum’s cost management initiatives have been yielding positive results. These initiatives are likely to have improved margins with a positive impact on earnings.

OXY’s Q4 Expectation

For the fourth quarter of 2025, Occidental Petroleum expects production of 1,440-1,480 thousand barrels of oil equivalent per day (Mboe/d). Output from the Permian Resources segment is pegged at 795-815 Mboe/d.

OXY’s Price Performance

OXY’s shares have gained 6.4% in the past three months compared with the industry’s growth of 15.5%.

OXY Stock Trading at a Premium

Occidental Petroleum’s shares are somewhat expensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 5.48X compared with the industry average of 4.89X.

Investment Thesis

Occidental Petroleum has continued to benefit from its strong U.S. footprint and disciplined emphasis on the Permian Basin, where the core development areas are delivering solid performance. Acquired assets are expected to have supported production growth during the fourth quarter.

Occidental Petroleum’s decision to sell the chemical business, OxyChem, to Berkshire Hathaway will allow it focus more on the core operation and further reduce debts and strengthen operations.

However, since the company typically maintains exposure to market commodity prices, the fluctuating oil prices can have an adverse impact on earnings.

Summing Up

Occidental Petroleum’s cash flow generation, initiative to lower debts and contribution from acquisitions are expected to have boosted its performance. Earnings from the Midstream segment are expected to be strong in the to-be-reported quarter.

Given OXY's weaker return than industry and premium valuation, it will be better for the investors to stay away from the stock and wait for a better entry point.

 

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This article originally published on Zacks Investment Research (zacks.com).

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