The Shares of Occidental Petroleum Corp dropped 7.89% to $24.53 Tuesday. This proved to be an all-around poor trading session for the stock market, with the S&P 500 Index SPX falling 0.87% to 4,152.10 and Dow Jones Industrial Average DJIA falling 1.36% to 34,269.16. This was the stock’s second consecutive day of losses.
Occidental Petroleum Corp. closed $7.99 short of its 52-week high ($32.52), which the company reached on March 5th. The stock underperformed when compared to some of its competitors Tuesday, as Exxon Mobil Corp. XOM fell 3.18% to $60.59, Chevron Corp. CVX fell 2.62% to $106.70, and ConocoPhillips COP fell 2.25% to $55.72. Trading volume (30.5 M) eclipsed its 50-day average volume of 18.2 M.
After reporting first-quarter results, its shares tumbled by almost 8% which is a much steeper decline than other U.S. producers experienced after a cyberattack on the Colonial Pipeline left the largest fuel conduit in the country shut down. The stock-market reaction appears overdone given the short-term nature of the problem rather than a structural decline in U.S. crude oil demand.
More important to flag is the progress Occidental Petroleum Corp has made since last year. Part of that can be seen in the shift in forecasts which was a year ago, analysts expected the company to turn a net loss of $660 million for the first quarter of 2021. Its net loss came in at roughly half of that. The real standout was its strong free cash flow of $1.6 billion, the company’s highest quarterly free cash flow in a decade and about double analysts’ expectations a year ago.