Occidental’s profits soar in ’18
Petroleum firm says production was most in five years; Huntsman also has solid year
Occidental Petroleum said Tuesday that its fourth quarter and full-year profits soared in 2018 as its U.S. production rose to its highest level in five years and prices moved higher for most of the year.
Occidental said its fourth quarter profits jumped 42 percent to $706 million from $497 million in same quarter in 2017. It's annual profit more than tripled to $4.1 billion from $1.3 billion in 2017.
Occidental, which has a stock market value of $49 billion, easily beat Wall Street expectations. The company said it earned $1.22 per diluted share earnings in the fourth quarter, 8 cents higher than analysts' estimates.
The exploration and production company has a large presence in West Texas' Permian Basin. A majority of its oil and gas production occurs there. Its total Permian oil production was up 25 percent over 2018 compared to 2017.
U.S. oil production has been
breaking records all year, and Occidental is no exception. This was their best quarter since 2013 for oil and gas production in the United States, pumping 410,000 barrels a day of oil equivalent in the fourth quarter, up 28 percent from the same quarter of 2017.
Total oil and gas production for the company was up nearly 13 percent, producing 700,000 barrels per day in the fourth quarter of 2018.
While prices fell in the fourth quarter, Occidental said it realized higher prices for its oil over the entire year. In the United States, Occidental said it realized $58.30 a barrel in 2018, up from $47.91 in 2017.
Occidental's stock closed at $65.75 per share on Tuesday, before the company released its earnings. — Erin Douglas Huntsman weathers weak demand, lower prices
Houston-area chemical maker Huntsman Corp. saw mixed results in the fourth quarter as it weathered weakening demand and lower prices, but still still ended 2018 with a solid profit for the years.
The Woodlands company said it lost $315 million in the fourth quarter, compared to a profit of $287 million the same period last year. Its revenue for the fourth quarter stayed essentially flat at about $2.2 billion.
For all of 2018, Huntsman reported $615 million profit, down 17 percent from $741 million in 2017. Revenues, however, jumped by $1 billion, or 12 percent to $9.3 billion last year from $8.3 billion in 2017.
Huntsman blamed the decline in profits on its 49 percent holdings in Venator, the pigments and additives company that Huntsman spun off into a separate public company in 2017. Prices for pigments and additives, a cyclical segment of the chemical industry, have fallen.
Revenue from one of Huntsmans major segments, polyurethane, dipped because of lower average selling prices in China and Europe in the fourth quarter. Polyurethanes are chemicals used to make high-resilience foam seating in cars and rigid foam insulation panels, among other uses.
Lower polyurethane prices were partially offset by a 5 percent boost in production volume thanks to the start of a polyurethane plant in China and the April 2018 acquisition of Demilec, a North American polyurethane spray foam company.
Uncertainty in global markets tied to Brexit and U.S.-Chinese trade talks spurred many of Huntsman's customers to rely on their existing inventories rather buy up new products in a "waitand-see" approach known as destocking.
Looking ahead Huntsman's CEO told investors in Tuesday earnings call he expects demand to pick up in 2019.based early year ordering patterns. A trade deal with China could boost demand, too, Huntsman said. An unfavorable Brexit deal would have minimal ($15 million) negative impact on the company’s supply chain in Europe, he added.
Huntsman stock gained 3.5 percent Tuesday to close at $22.99 a share.