Occidental Petroleum Earnings Preview: Will Warren Buffett’s Big Bet Keep Rising?
Investing.com | May 09, 2023 19:16
- Occidental Petroleum reports its first quarter 2023 results this Tuesday, May 9, after the market closes.
- Warren Buffett has denied that he will take control of the company.
- The company's fair value is $75.79, and its risk is medium, according to InvestingPro .
"There's speculation that we're going to take control of Occidental Petroleum. But we're not going to do that, we wouldn't know what to do with it."
With this resounding statement, Warren Buffett, chairman of Berkshire Hathaway (NYSE:BRKa), dismissed rumors about a possible buyout of the U.S. oil company at the annual shareholder meeting last Saturday.
Nevertheless, the rumors are not for nothing. Occidental Petroleum (NYSE:OXY) is one of Buffett's biggest purchases in recent years, along with Chevron (NYSE:CVX) (9.8% of the portfolio), in the tycoon's growing bet on the energy sector.
Last August, the Federal Energy Regulatory Commission (FERC) granted Berkshire approval to buy up to 50% of the energy giant's outstanding shares.
Since then, Buffett has steadily increased his stake in Occidental. Today, Berkshire Hathaway owns 23.6% of the company. This represents 4.1% of Buffett's portfolio. It ranks seventh in his portfolio, with a stake valued at $12.24 billion.
Source: InvestingPro
Berkshire owns $10 billion in Occidental preferred stock and has warrants to purchase another 83.9 million shares of common stock for $5 billion, or $59.62 each.
The warrants were obtained as part of the company's 2019 agreement that helped fund Occidental's purchase of Anadarko.
What to Expect From the Company’s Results?/h2
This Tuesday, May 9, after the market closes, the company reports its 2023 first-quarter results. The consensus expects a profit of $7,373 million.
As for earnings per share (EPS), analysts have lowered their expectations for this quarter by -41.8%, from $2.16 per share to $1.25 per share over the last 12 months.
Source: InvestingPro
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Disclaimer: This article was written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest nor is it intended to encourage the purchase of assets in any way.
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