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Sterne Agee Isn't Gushing About Occidental Petroleum

Stocks in this article: OXY PAA

NEW YORK ( TheStreet) -- How can you mend a broken heart? That's from a Bee Gees song. But it could be how investors in Occidental Petroleum (OXY) are feeling.

We thought Occidental had good news for us during its Jan. 30 earnings conference call about its plans to split the company and sell some assets. Instead, we were disappointed by news the asset sale results will be announced closer to midyear.

OXY earnings numbers weren't a disappointment. It announced core income for the fourth quarter of 2013 of $1.4 billion ($1.72 per diluted share), compared with $1.5 billion ($1.83 per diluted share) for the fourth quarter of 2012. Net income was $1.6 billion ($2.04 per diluted share) for the fourth quarter of 2013, compared with $336 million (42 cents per diluted share) for the fourth quarter of 2012.

Speaking of asset sales, the fourth quarter of 2013 included an after-tax gain of $665 million (83 cents per diluted share) from the sale of a portion of an investment in the General Partner of Plains All American Pipeline (PAA). The details of the quarter can be found in the company's news release from Jan. 30.

Shares of OXY have been in decline since the stock crested at $99.42 on Nov. 22, 2013. Analyst Tim Rezvan, who covers OXY for Stearne Agee, sent me the following update with a title that piqued my curiosity. It read as follows:

"Despite a bullish outlook that highlighted a steep domestic oil production growth outlook, OXY shares performed in-line on Thursday, with investors disappointed by news that asset sale results will be announced closer to midyear. Despite the delay, it is clear that the one-two punch of California and the Permian Basin provide a strong foundation for oil growth. And we believe an acceleration in California demonstrates the company's comfort level with the permitting/regulatory environment."

But he didn't raise his neutral rating on OXY, and the following one-year chart may help to illustrate some of reasons.

OXY Chart
data by YCharts

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