Oxy gains back most of its Oct. 13 crash losses, but analyst cuts earnings projection.Oxy gains back most of its Oct. 13 crash losses, but analyst cuts earnings projection Occidental Petroleum Occidental Petroleum Corporation ("Oxy") NYSE: OXY is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. stock recovered most of its Oct. 13 share-price loss of 8.5 percent by Wednesday last week, but Shearson Lehman Hutton Inc. said it has little more growth potential in the near term. "Our main concern is the deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the chemical business," said Shearson analyst Robin Shoemaker last week about the Los Angeles-based oil and chemical company. Prices for virtually all commodity chemicals have been declining for several months, noted the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of analyst. "The downturn in chemicals is particularly important to Oxy because 80 percent of its operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before in second quarter 1989 came from its chemicals division," he explained. This month Shoemaker lowered his earnings estimates for 1989 to $1.10 from $1.25 and 1990 profits to $1.20 from $1.50. "I think the stock could do better when we see the bottom of chemical margins," said Shoemaker last week. "Until then it doesn't have anything to propel pro·pel tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin it higher. Furthermore, "We do not see any significant improvement ahead for Oxy's oil and gas business," he wrote in an Oct. 4 report a few days after meeting with company management. Nevertheless, Oxy shares are supported by its high dividend, he said. While most domestic oil companies yield about 4.5 percent, Oxy pays about 9 percent. And the $2.50-a-share dividend is not in jeopardy, he said. Los Angeles-based Shearson financial consultant William Lappas said the high dividend serves as an anti-takeover defense Noun 1. anti-takeover defense - resistance to or defense against a hostile takeover opposition, resistance - the action of opposing something that you disapprove or disagree with; "he encountered a general feeling of resistance from many citizens"; "despite . Spending so much on dividends leaves little to new owners for financing their takeover, he said. "Oxy is a real rock. Until [Chairman and Chief Executive] Armand Hammer Armand Hammer (May 21, 1898 – December 10, 1990) was an American industrialist and art collector. Hammer was CEO of the Occidental Petroleum Company, an oil and natural gas exploration and development company. dies. Then it'll go to $38 a share and probably will be sold," speculated Lappas. Oxy traded in the $28 range late last week. Hammer is widely considered to exercise strong control over most of the company's operations and strategies. Shoemaker in New York, however, downplayed the Hammer departure-take-over scenario. He predicts shares will roughly mirror the market during the next 18 months regardless of Hammer. |
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