This Top Warren Buffett Stock Continues to Deliver an Impressive Performance

Core Viewpoint - Berkshire Hathaway continues to invest significantly in Occidental Petroleum, demonstrating confidence in the company's ability to generate shareholder value despite market volatility [1][2][16] Financial Performance - Occidental Petroleum reported adjusted income of $396 million, or $0.39 per share, in the second quarter, down from $860 million, or $0.87 per share, in the first quarter [4] - The company experienced a decline in pre-tax income from its oil and gas segment, posting $934 million, down from $1.7 billion in the first quarter, primarily due to lower commodity prices [5] - Average global crude oil prices fell by 10% compared to the first quarter, while domestic natural gas prices dropped by 45% [5] - Despite lower prices, Occidental produced 1.4 million barrels of oil equivalent (BOE) per day, exceeding guidance, and achieved strong results in its midstream and marketing segment [6] Cash Flow and Debt Management - Operating cash flow before working capital adjustments was $2.6 billion, with free cash flow totaling $700 million, both slightly lower than the previous quarter [7] - Occidental utilized its free cash flow to pay dividends and reduce debt, securing $950 million from asset sales since the start of the second quarter [8][10] - The company has repaid $3 billion of debt so far this year, significantly exceeding its target of at least $4.5 billion in debt reduction within a year of closing its CrownRock deal [11] Future Outlook - Occidental anticipates continued use of excess free cash flow for debt repayment, with approximately $1.6 billion of debt maturing in 2026 and another $1.5 billion in 2027 [12] - The company expects a surge in free cash flow from non-oil sources, estimating an increase of $1 billion in 2026 and an additional $500 million in 2027 [13] - As debt decreases, Occidental plans to return more cash to investors, including potential share repurchases and redemption of Berkshire's preferred equity investment [14] Investment Position - Berkshire Hathaway owns nearly 27% of Occidental's outstanding shares, valued at almost $12 billion, making it the seventh-largest holding in its investment portfolio [15]