Gains Boost Occidental's Profit

Occidental Petroleum(OXY Quote - Cramer on OXY - Stock Picks), the fourth-largest U.S. oil and gas company, announced Tuesday that its second-quarter earnings were up 64% from the same period a year ago.

The company earned $1.4 billion, or $1.68 a share in the quarter, up from $860 million, or 99 cents a share, a year earlier.

Occidental's latest quarter included gains of $419 million, or 50 cents a share, while last year featured a $347 million after-tax loss, or 40 cents a share, related to an asset write-off.

Excluding the gains, this year's profit would have been around $1.18. Analysts surveyed by Thomson Financial had predicted that Occidental would earn $1.10 a share in the second quarter.

Occidental generated $4.41 billion in revenue, down slightly from $4.47 billion last year.

A highlight of the quarter was the completion of the Dolphin natural gas project in Qatar. Occidental owns 24.5% of the project. The revenue it generates is expected to play a significant role for the company as it ramps up production there, CEO Ray Irani said in a press statement.

Quarterly income from Occidental's oil and gas segment, excluding assets in Pakistan that were sold and the Horn Mountain asset swap with BP(BP Quote - Cramer on BP - Stock Picks), was $1.68 billion, down from $1.86 billion a year ago.

The decrease was attributed to lower crude oil prices, increased depreciation, depletion and amortization costs and higher exploration and operating expenses.

Oil and gas production averaged 587,000 barrels of oil equivalent per day during the first half of the year. New production from the Dolphin project and from newly acquired assets in the Permian Basin of Texas are expected to lift production above 630,000 BOE a day by the end of 2007, Irani says.

Occidental's stock was recently trading 4% lower at $58.93.