Oil stocks: Buffett’s favorite Occidental Petroleum among key revenues as crude oil prices retreat
Canada-based oil sands producer Suncor (SU) reported first-quarter results late Monday, bolstered by a rise in oil prices after Russia invaded Ukraine. Suncor shares recovered early Tuesday, when oil shares were mixed overall as crude oil prices shifted lower.
Oil producer Occidental Petroleum (OXY) and oil transport supplier Teekay Tankers (TNK) reports results for the first quarter on Tuesday and Thursday, respectively.
Warren Buffetts Berkshire Hathaway (BRKB) has accumulated a large stake in the OXY share in recent months.
Suncor Earnings, Suncor Share
Appropriations: Wall Street expected Suncor to earn $ 1.27 per share, a jump of 218%, according to FactSet. Sales were expected to increase by 31% to $ 9.184 billion.
Results: Suncore’s earnings per share rose 291% to $ 1.93, according to FactSet. The company increased its quarterly dividend by 12%, to 47 cents. The company said it cut long-term debt by $ 728 million during the quarter.
Suncor shares rose 1.4% to 35.30 in the stock market today. Stocks have a 99 Composite Rating. Their EPS rating is 74.
Among other oil stocks, Exxon (XOM) fell 7.9% to 84.46. The stock fell below a buy point of 89.90. Chevron (CVX) fell 6.7% to 159.25, slipping below the 50-day moving average. The shares were in a flat base with a buy point of 174.86. Buffett’s Berkshire has significantly increased its CVX stock in recent months.
Russia’s invasion has sent oil prices higher, as buyers turn away from the country’s supplies and as markets worry about shipping disruptions.
But crude oil prices and oil inventories were down on Monday, amid broader concerns about the economy and the impact on oil demand from China’s coronavirus shutdowns, along with general stock market sales. Futures for light crude oil in the US fell 6.1% to $ 103.09 per barrel
Suncor, a major producer in Canada’s oil industry, uses mining and heating technology to extract oil sands – and bitumen, the thick form of crude oil contained in the sand – from the ground. Along with bitumen, oil sands contain sand, clay and water. When Suncor extracts bitumen, the refineries convert it to products such as gasoline, asphalt and other materials.
Elliott buys Suncor shares
Elliott Investment Management said last month that they had taken a stake of about 3.4% in Suncor. At the time, it also said it had sent a letter to Suncor’s board stating that the company had “seen a decline in the exceptional performance that was previously its hallmark” which had led to “missed production targets, high costs and safety failures.” Elliott also claimed that the Suncor stock had underperformed many of its rivals.
Elliott urged Suncor to add five new independent board members with “deep expertise” in Canadian energy. And it called for a review of Suncore’s management team, as well as a review of ways to strengthen its operations outside Suncore’s oil sands business.
It also asked Suncor to increase its return on capital to more than 80% of its discretionary cash flow, after capital expenditures and dividends. It will be up from 50%.
Suncor said in a brief statement that they “look forward to working with Elliott over time to better understand their perspective.”
Elliott said that since 2014, 12 employees or contractors at Suncor have died in accidents. It said that the number was greater than the direct peers combined. Regulators and activists have also examined the environmental impact of Suncore’s operations.
Occidental Petroleum Earnings
Appropriations: Wall Street expects Occidental to earn $ 1.97 per share, well up from the loss a year ago. Revenue was expected to jump 47% to $ 7.782 billion.
Results: Deadline Tuesday after closing.
The OXY stock fell 10.9% to 57.84 on Monday. The stock is falling back towards its rising 50-day line.
Like other oil stocks, the assessments from IBD are strong. Stocks have a 99 Composite Rating. Their EPS rating was 74.
Occidental is the largest landowner in the Permian Basin, located in Texas and New Mexico. It also has operations in the Gulf of Mexico, Colorado and abroad – in Oman, Algeria and the United Arab Emirates.
Shareholders in Occidental voted on Friday against a proposal from the investor group Follow This that the oil company should set targets for reducing carbon emissions, according to Bloomberg. Occidental the same day said the board had declared a regular quarterly dividend of 13 cents per share.
Berkshire has become the largest shareholder in Occidental, with Warren Buffett uploading the stock earlier this year. Berkshire owns 15.2% of the OXY stock, according to FactSet data.
Teekay Tankers revenue
Appropriations: Wall Street expects Teekay to report a loss of 76 cents per share, less than a year ago. Sales estimates were unavailable.
Results: Deadline before opening on Thursday.
The stock fell 12.5% to 14.38 on Monday, which was below the 50-day line.
Teekay operates tankers that transport crude oil. The stock’s composite rating is 88. The EPS rating is 27.
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