Oil and gas producer Occidental Petroleum (NYSE: OXY) fell short of the market’s revenue expectations in Q1 CY2026, with sales falling 11% year on year to $5.11 billion. Its non-GAAP profit of $1.06 per share was 80.3% above analysts’ consensus estimates.

Is now the time to buy Occidental Petroleum? Find out by accessing our full research report, it’s free.

Company Overview

Backed by Warren Buffett's Berkshire Hathaway as a major shareholder, Occidental Petroleum (NYSE: OXY) explores for, develops, and produces oil, natural gas liquids, and natural gas, primarily in the United States and Middle East.

Revenue Growth

Cyclical industries such as Energy can make mediocre companies look great for a time, but a long-term view reveals which businesses can actually withstand and adapt to changing conditions. Regrettably, Occidental Petroleum’s sales grew at a tepid 7.6% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the energy upstream and integrated energy sector, but there are still things to like about Occidental Petroleum.

Even a long stretch in Energy can be shaped by a single commodity cycle, so extending the view to ten years adds another perspective and reveals which companies are built to grow regardless of the pricing regime. Occidental Petroleum’s annualized revenue growth of 6.1% over the last ten years is below its five-year trend, but we still think the results were good.

This quarter, Occidental Petroleum missed Wall Street’s estimates and reported a rather uninspiring 11% year-on-year revenue decline, generating $5.11 billion of revenue.

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Adjusted EBITDA Margin

Occidental Petroleum has been a well-oiled machine over the last five years. It demonstrated elite profitability for an upstream and integrated energy business, boasting an average EBITDA margin of 54.7%.

Looking at the trend in its profitability, Occidental Petroleum’s EBITDA margin rose by 2 percentage points over the last year, as its sales growth gave it operating leverage.

in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Cash Is King

Adjusted EBITDA shows how profitable a company’s existing “rock” is before financing and reinvestment, while free cash flow shows how much value remains after paying to replace those wells. Because production declines over time, strong EBITDA can coexist with weak FCF if drilling is expensive or declines are steep. FCF therefore captures both operating efficiency and the cost of sustaining production.

Occidental Petroleum has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the energy upstream and integrated energy sector, averaging 24.1% over the last five years.

The level of free cash flow is important, but its durability across cycles is just as critical. Consistent margins are far more valuable than volatile swings driven by commodity prices.

Occidental Petroleum’s ratio of quarterly free cash flow volatility to WTI crude price volatility over the past five years was 4.1 (lower is better), indicating excellent insulation from commodity swings. This stability supports superior capital access in downturns and positions Occidental Petroleum to act as a consolidator when weaker peers are forced to retrench.

You may be asking why we wait until the free cash flow line to perform this stability analysis versus commodity prices. Why not compare revenue or EBITDA to WTI Crude prices in the case of Occidental Petroleum? Because what ultimately matters is not how much revenue or profit you earn when prices are high but how much cash you can generate when prices are low. Free cash flow is the superior metric because it includes everything from hedging prowess to growth and maintenance capex to management behavior during good times and bad.

Occidental Petroleum burned through $112 million of cash in Q1, equivalent to a negative 2.2% margin. The company’s cash flow turned negative after being positive in the same quarter last year, which isn’t ideal considering its longer-term trend.

Key Takeaways from Occidental Petroleum’s Q1 Results

It was good to see Occidental Petroleum beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Overall, this print had some key positives. The stock remained flat at $59.30 immediately after reporting.

So do we think Occidental Petroleum is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).