Dj Halliburton Corporate Stock Underperforms Thursday When Compared To Competitors

Occidental Petroleum Corporation OXY reported third-quarter 2024 earnings of $1 per share, which surpassed the Zacks Consensus Estimate of 80 cents by 25%. In the year-ago quarter, the company recorded earnings of $1.18 per share.

GAAP earnings were 98 cents per share compared with $1.20 in the year-ago quarter.

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Total Revenues of OXY

Total revenues was $7.15 billion, which lagged the Zacks Consensus Estimate of $7.40 billion by 3.4%. The top line decreased 3.4% year over year due to lower contributions from its Chemical and Midstream & Marketing segments.

Occidental Petroleum Corporation Price, Consensus and EPS Surprise

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

OXY’s Segmental Details

Oil and Gas revenues totaled $5.67 billion in the reported quarter, up 1.8% year over year.

Chemical revenues amounted to $1.25 billion, down 4.8% year over year.

Midstream & Marketing revenues of $282 million plunged 20.3% year over year.

Production & Sales of OXY

The total production volume was 1,412 thousand barrels of oil equivalent per day (Mboe/d). The metric surpassed the company’s production guidance of 1,370-1,410 Mboe/d. Permian and Rockies & Other Domestic volumes exceeded the midpoint of the guided range, which contributed toward strong average daily production volumes.

Total sales volume was 1,411 Mboe/d, up 15.5% from the year-ago period.

OXY’s Realized Prices

Realized prices of crude oil decreased 6.7% year over year to $75.33 per barrel on a worldwide basis. Realized natural gas liquids prices decreased 2.7% year over year to $20.47 per barrel globally.

Natural gas prices declined 79.2% year over year to 40 cents per thousand cubic feet.

Highlights of OXY’s Q3 Release

Occidental’s overall third-quarter production volumes were better than expected, due to strong contribution from Permian assets. Gulf of Mexico’s average daily production volumes in the third quarter of 136 Mboe/d were slightly below the lower end of guidance, due to the weather impacts.

OxyChem’s income remained unchanged from the second quarter of 2024 income, as market conditions remained relatively unchanged.

Interest and debt expenses increased 35.7% to $312 million from $230 million in the year-ago quarter.

Financial Position of OXY

As of Sept. 30, 2024, Occidental had cash and cash equivalents of $1.76 billion compared with $1.4 billion as of Dec. 31, 2023.

As of Sept. 30, 2024, the company had long-term debt (net of current portion) of $25.46 billion compared with $18.5 billion as of Dec. 31, 2023. The company retired nearly $4 billion in debt in the third quarter, which is nearly 90% of its near-term debt retirement target.

OXY generated nearly $3.8 billion of operating cash flow in third-quarter 2024.

Total capital expenditure was $1.68 billion compared with $1.61 billion in the year-ago period.

OXY’s Guidance

For the fourth quarter of 2024, OXY expects production of 1,430-1,470 Mboe/d. Output from the Permian Resources segment is anticipated at 751-769 Mboe/d. Occidental expects international production volumes for fourth-quarter 2024 in the range of 228-234 Mboe/d.

Exploration expenses are estimated to be $120 million and interest expenses to be $340 million for the fourth quarter of 2024.

Zacks Rank of OXY

Occidental currently carries a Zacks Rank #5 (Strong Sell).

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

Recent Releases

Devon Energy Corp. DVN reported third-quarter 2024 earnings per share (EPS) of $2.51, outpacing the Zacks Consensus Estimate of $2.47 by 1.6%.

The Zacks Consensus Estimate for DVN’s 2024 earnings is pegged at $4.86 per share, implying a decline of 7.3% in the past 60 days. The company delivered an average earnings surprise of 4.99% in the trailing four quarters.

Halliburton Company HAL reported third-quarter 2024 adjusted net income per share of 73 cents, missing the Zacks Consensus Estimate of 75 cents and below the year-ago quarter profit of 79 cents (adjusted).

The Zacks Consensus Estimate for HAL’s 2024 earnings is pegged at $3.03 per share, implying a decline of 3.5% in the past 60 days. The company delivered an average earnings surprise of 1.88% in the trailing four quarters.

Chevron Corporation CVX reported adjusted third-quarter earnings per share of $2.51, beating the Zacks Consensus Estimate of $2.47. However, the company’s bottom line fell from the year-ago adjusted profit of $3.05, due to weaker oil price realizations and a dip in domestic refined product sales margins.

CVX’s long-term earnings growth rate is currently pinned at 4.22%. The Zacks Consensus Estimate for CVX’s 2024 earnings is pegged at $3.03 per share, implying a decline of 3.5% in the past 60 days.

Zacks Investment Research

Ormat Technologies, Inc. ORA recently announced that it has agreed to sign an Engineering, Procurement and Construction (EPC) contract with Contact Energy, involving geothermal energy. This contract, valued at $200 million, entails the development of the 101-megawatt (MW) Te Mihi Stage 2 geothermal power plant in New Zealand.

Te Mihi Stage 2 will gradually replace the outdated Wairakei geothermal station and is slated to be completed by mid-2027.

ORA’s Position in Geothermal Generation

With the effects of climate change becoming increasingly evident, the shift to renewable energy sources like geothermal has increased in recent times to effectively reduce greenhouse gas emissions. Since geothermal plants can provide power to the grid constantly unaffected by weather or daylight, this source of energy serves as a flexible and reliable form of backup power during major electricity outages or disruptions.

This is likely to have prompted Grand View Research to forecast a compound annual growth rate (CAGR) of 3.1% for the global geothermal energy market during the 2024-2030 time period.

Ormat Technologies, being a forerunner in generating electricity from geothermal energy, stands to gain significantly from the aforementioned market growth prospect. The latest EPC contract is the fourth major geothermal project in New Zealand, highlighting its expertise in binary technology, which works well for high-temperature geothermal sites.

Ormat Technologies expects its year-end Product Segment backlog to exceed $300 million following the contract signing. Most of the revenues from this deal will be recognized in 2026 and 2027. The Te Mihi Stage 2 project, along with 160 MW of other projects underway in New Zealand, strengthens ORA’s position as one of the leading companies contributing to this nation’s renewable energy capacity expansion.

Subject to final investment decision, Contact Energy is planning a second phase of development named Te Mihi Stage 3, which is expected to come online by mid-2031. ORA is expected to clinch another EPC contract for this facility, which, in turn, is likely to boost its future revenues.

Opportunities for ORA’s Peers

Some other companies, which are increasing investments in geothermal generation and are expected to gain from the expanding global geothermal market, are discussed below.

Baker Hughes Company BKR: It has been working on geothermal energy for more than 40 years, with projects in more than 30 countries around the world. The company has developed a prototype metal-to-metal mud motor with a mud-lubricated bearing assembly and a titanium transmission for harvesting energy from an enhanced geothermal system in Iceland.

The company has a long-term (three to five years) earnings growth rate of 25.9%. The Zacks Consensus Estimate for BKR’s 2024 sales indicates year-over-year growth of 8.4%.

Halliburton Company HAL: It provides a wide range of products, technology and integrated services to help reduce costs and manage risks in geothermal projects. The company works closely with clients to develop the best solutions for various types of geothermal energy projects.

The company has a long-term earnings growth rate of 2.7%. The Zacks Consensus Estimate for HAL’s 2025 sales indicates year-over-year growth of 3.2%.

ORA Stock’s Price Movement

Shares of ORA have gained 3.4% in the past month compared with the industry’s 11% growth.

Halliburton Company , headquartered in Houston, Texas, delivers energy, engineering, and construction services and produces specialized products for the energy sector. With a market cap of $26.5 billion, Halliburton supports customers in the exploration, development, and production of oil and natural gas through a range of services, products, and integrated solutions (NGM24).

Shares of this leading oil & gas equipment and services provider have substantially underperformed the broader market over the past year. HAL has declined 21.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.5%. In 2024 alone, HAL stock is down 16.5%, while the SPX is up 25.5% on a YTD basis.

Narrowing the focus, HAL’s underperformance looks less pronounced compared to the SPDR S&P Oil & Gas Equipment Services ETF . The exchange-traded fund has surged marginally over the past year and on a YTD basis.