Occidental reported $2.75 of diluted earnings per share for the June quarter against $0.26 a year earlier. Its own release leads with the balance sheet: an 8% dividend increase, and principal debt cut by $1.9 billion to $11.8 billion, "advancing toward the $10.0 billion milestone". Seven years after the Anadarko acquisition, that is the story the company wants told, and it is the story this print has been read as.
It is not where the earnings came from. Pre-tax income from continuing operations went from $560 million to $3,915 million, and Occidental splits that increase by segment in the same release. Lower interest and debt expense accounts for $163 million of the $3,355 million — 4.9%. The two operating segments account for 96% of it.
Where the $3,355 million came from
- Oil & Gas: +$1,915 million, 57% of the increase. Almost none of it is barrels. Net sales volumes went from 1,397 to 1,433 thousand barrels of oil equivalent a day, up 2.6%, while the realised worldwide crude price went from $63.76 to $96.78, up 52%. Hold volume at the prior year and segment net sales would have risen about $129 million; the other $1,744 million is price and mix. That split is our arithmetic on Occidental's disclosed volumes and prices, not a company disclosure.
- Midstream & Marketing: +$1,299 million, 39%. Segment pre-tax income went from $39 million to $1,338 million — a company record — which the release attributes to "higher crude margins related to the timing of crude sales and higher gas margins from transportation capacity optimizations". $855 million of the swing sits in the adjusted result; the other $444 million is a swing in Occidental's own items affecting comparability, mostly derivative and asset-sale gains.
- Lower interest and debt expense: +$163 million, 4.9%. And $47 million of that is a gain on retiring debt early, which Occidental itself books as an item affecting comparability. The recurring coupon saving is $116 million — 3.5% of the increase.
- Corporate, other: −$22 million.
- The share count did nothing. Diluted shares went from 1,010.4 million to 1,012.2 million, up 0.18%. There is no buyback in this quarter's EPS, and management told the call that buybacks stay behind the preferred redemption it expects in 2029.
The table above carries those lines with the two EPS multiples underneath them.
Two amplifiers sit below the pre-tax line
Pre-tax income from continuing operations rose 7.0 times. Income from those operations attributable to common shareholders rose 17.8 times, from $158 million to $2,811 million. Two things do the extra work, and neither of them is operating.
The effective tax rate on continuing operations fell from 40% to 23%. At last year's rate, this quarter's $3,915 million of pre-tax income would have left $2,363 million rather than $3,000 million: the rate move is worth $637 million. Occidental guides a 24–26% adjusted rate for the full year, so 23% is the ordinary end of its own range and 40% was the abnormal one — a small pre-tax number carrying a large and largely fixed international tax bill.
The preferred dividend, meanwhile, does not move at all. Berkshire Hathaway's preferred stock costs Occidental $170 million a quarter whatever oil does. Against $338 million of continuing-operations income last June, the preferred and the minority interest took 53% of it. Against $3,000 million this June, they took 6%. That is real operating leverage, but it is leverage on a coupon, not on a cost base — and it works in both directions.
"Tenfold" is the middle of three numbers
The $0.26 the tenfold is measured from is a total-company line, and half of it — $0.13 — came from discontinued operations: OxyChem, sold to Berkshire Hathaway on 2 January 2026. Occidental has restated every 2025 revenue and segment comparative to continuing operations, but reported EPS is a total-company figure and still carries the earnings of a business that has gone.
Put both ends on continuing operations and diluted EPS went from $0.13 to $2.76 — twenty-one fold. Put both ends on the adjusted continuing-operations line the company itself headlines, and it went from $0.26 to $2.40 — 9.2 times. Three multiples, all printed in the same release, spanning 9x to 21x. The one in circulation is the middle one, and it is the only one of the three that compares a company that owned OxyChem with a company that does not.
What of it recurs
Our forward model for Occidental is built on this quarter, and it does not treat this quarter as a level. Two of its assumptions are exactly the two lines above.
Oil & Gas is modelled as disclosed volume times disclosed price, and the price is glided down from about $52.6 per barrel of oil equivalent in the June quarter — our derivation, dividing the segment's disclosed net sales by its disclosed sales volume — to roughly $40 by 2030, which is what Occidental actually averaged across 2025. That reversion is our assumption rather than the company's, though it sits consistently with the roughly $65 WTI on which management's own 2030 targets are set. The June quarter realised $92.79 WTI.
Midstream is stepped down 85% at the basis quarter, to about $173 million a quarter — again the 2025 average. That is not an aggressive assumption. Management guided the very next quarter's midstream pre-tax income to between minus $100 million and plus $100 million, and the segment's adjusted income for the first half of 2026 alone, $1,552 million, is already above the top of the $1,300–1,500 million range guided for the whole year. The record came out of the same Permian gas dislocation that drove Occidental's own domestic realised gas price to negative $1.48 per thousand cubic feet, minus 51% of the NYMEX marker, and the CFO told the call the spread should normalise as takeaway capacity comes online.
So the model already assumes that most of the tenfold does not repeat. What it keeps is the interest saving — and it keeps it on the balance sheet rather than in the earnings, because debt is carried in net cash. A smaller coupon shows up in what the equity is worth, not in what the business earns.
On those assumptions the base case published on 27 August was $47.78 a share. Occidental closed at $60.04 on 4 September, about 26% above it. That gap is not a disagreement about the June quarter — every figure above is the company's own. It is a disagreement about how much of the quarter is a level rather than a print.
What the September quarter settles
- Midstream pre-tax income against the guided minus $100 million to plus $100 million. A second billion-dollar quarter breaks the step-down; a break-even one confirms it.
- The realised crude price against WTI. June printed 104% of the marker — the only quarter above it in the six the release tabulates, the other five sitting at 97–100%.
- The domestic realised gas price, at negative $1.48 per Mcf against +$1.33 a year earlier. Both segments are on the other side of the same trade.
- Principal debt against the $10.0 billion milestone. $11.8 billion at 30 June, with only $414 million of maturities through the end of 2029, so the rest is voluntary. Management put the annual interest saving at roughly $740 million against 2025 once the milestone is reached — which would finally make the deleveraging the story the release says it already is.
Our preview before the print named the realised oil price and the debt paydown as the two things to watch. Both showed up. Only one of them showed up in the earnings.
Every figure here comes from Occidental's second-quarter 2026 results of 5 August 2026 and the schedules published with them — segment income, the income statement, realised prices and sales volumes, the tax detail and the items affecting comparability — with 2025 comparatives on the restated continuing-operations basis the company now uses. The quarter is captured in full on our Q2 2026 release page. Three things are ours rather than Occidental's: the share-of-increase column, the split of the Oil & Gas increase into volume and price, and every forward assumption behind the $47.78 base case published on 27 August. Guidance for the September quarter and full-year 2026 is read from Occidental's own conference-call deck; the remarks on interest savings, buyback priority and gas normalisation are from the call of 6 August. The $60.04 price is the 4 September close — a snapshot, not a live quote.
