Light Earnings at Occidental

Profit surges but misses Wall Street estimates by 15 cents a share.
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Independent oil, gas and chemicals producer

Occidental Petroleum

(OXY) - Get Report

said second-quarter earnings rose from a year ago on high crude prices and strong chemicals sales.

The company reported net income of $1.54 billion, or $3.82 a share, compared with $581 million, or $1.48 a share, in the same period a year ago. Second quarter 2005 net income included a $619 million tax gain related to an IRS issue and an $89 million after-tax gain from the sale of 11 million shares of Lyondell Chemical.

Excluding the gains, earnings for the second quarter were $851 million, or $2.12 a share, compared with $584 million, or $1.49 a share, for the same period in 2004. The results lagged Wall Street's expectation by 15 cents a share, according to the Thomson Financial poll.

Occidental's worldwide production for the first six months of 2005 was 560,000 barrels of oil equivalent per day, down from 571,000 barrels for the first six months of 2004, primarily due to weather in the Gulf of Mexico and maintenance downtime.

Strong earnings from it chemicals unit of $225 million for the second quarter of 2005 compared with $92 million last year. They were driven by higher margins in chlorine, caustic soda and polyvinyl chloride, and helped offset some of the lost production in gas and oil production.

The company noted its success in reaching a new production-sharing contract to develop Oman's giant Mukhaizna oil field, as well as other agreements to resume operations in Libya and to acquire oil and gas producing properties in the Permian Basin of Texas. These new contracts set the stage for future production growth, the company said in the release.

Shares of Occidental were down 59 cents, or 0.7%, to $79.78 in premarket trading.