Occidental Petroleum Q3 2026: Debt Paydown Fuels a 30% EPS Beat
As seen on the 24/7 Wall St. homepage on November 9, 2026.
Occidental's debt paydown has cut quarterly interest and debt expense to $78 million from $266 million a year ago, powering a roughly 30% adjusted EPS beat even as revenue came in just under consensus. Management points to more than $4 billion in added annual cash flow by 2030 with faster shareholder returns attached.
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Occidental Petroleum reported adjusted earnings per share of $1.91 for the third quarter of 2026, well ahead of the $1.47 consensus estimate and good for a roughly 30% beat. That extended the company's streak of topping Wall Street's EPS expectations to six consecutive quarters, a run that now covers every quarter back to Q4 2024.
The driving force behind the outperformance was a dramatic reduction in interest and debt expense, which fell to $78 million in the quarter from $266 million in the same period a year earlier. That swing came directly from an aggressive debt retirement campaign that cut long-term net debt to $11.63 billion.
Revenue of $6.77 billion came in just below the $6.89 billion consensus estimate, missing expectations even as it rose year over year. Production exceeded the guidance midpoint, led by the Permian and Rockies business units, though narrowing gas spreads between Waha and the Gulf Coast and derivative losses weighed on the headline numbers.
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CEO Richard Jackson highlighted what he called an important milestone, noting the company reduced principal debt to $10.0 billion after retiring $10.4 billion since the beginning of the year. He tied the stronger balance sheet directly to a plan targeting more than $4.0 billion in additional annual sustainable cash flow by 2030, with faster capital returns to shareholders as a byproduct. The common dividend rose to $0.28 per share for the quarter, up from $0.26 in Q2 2026.
Free cash flow reached $2.78 billion for the quarter, up sharply year over year, while operating cash flow came in at $3.67 billion. Capital expenditures fell to $1.32 billion, reflecting a leaner spending posture as management prioritizes balance-sheet strength over aggressive reinvestment. With net debt now well below where it stood at the start of the year, the question for investors is how quickly Occidental converts its improving cash flow profile into tangible shareholder returns beyond the dividend.