Occidental’s earnings surge 63%

Occidental Petroleum Corp. on Thursday posted a record second-quarter profit that jumped 63% from last year as the Westwood company sold more oil and natural gas into a soaring energy market.

The company earned $2.3 billion, or $2.78 a share, up from $1.41 billion, or $1.68, for the year-earlier period. The profit was 24% higher than Occidental’s record first-quarter results this year and slightly above the average estimate of $2.75 a share from analysts surveyed by Thomson Financial.

Sales for the quarter increased 61% to $7.1 billion, compared with $4.4 billion for last year’s second quarter.

The surge reflected a 5% boost in production -- to the equivalent of 588,000 barrels of oil a day -- and sharply higher commodities prices. Occidental said it received an average of $110.12 for every barrel of oil it sold during the quarter, an 86% jump from an average of $59.11 per barrel in the second quarter of 2007. Its average domestic natural gas price was 41% higher for the period.

Eitan Bernstein, an oil analyst with FBR Capital Markets, called the results “solid.” Citing Occidental’s plans to step up drilling and accelerate its stock buybacks, Bernstein raised his annual earnings estimate to $10 a share from $9.65.

“We are pleased with Oxy’s success and growth,” Occidental Chairman Ray R. Irani said. “In light of excellent additions to our asset portfolio and promising projects in the pipeline, we expect 2008 to be another outstanding year for Oxy.”

The company struck a deal this year that would lift production from its operations in the Permian Basin, an area primarily in West Texas.

In addition, Occidental said it would increase spending on projects, investing $4.7 billion this year to raise production from fields in California, Texas and Colorado, as well as in Argentina, Colombia and Libya.

Occidental shares rose $1.12, or 1.6%, to $73.34 on Thursday. The company released its earnings before the market opened.

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elizabeth.douglass@latimes.com