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Apache (APA) Q1 Earnings: Will it Beat on Permian Strength?
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Apache Corporation (APA - Free Report) is expected to beat expectations in first-quarter 2018 results, when it releases earnings on May 2, after the market closes. The current Zacks Consensus Estimate for the quarter under review is a profit of 27 cents on revenues of $1,640 million.
In the preceding three-month period, the company delivered a positive earnings surprise of 57.1% by reporting adjusted earnings of 33 cents per share against the Zacks Consensus Estimate of 21 cents. The outperformance stemmed from higher oil and gas realizations, and lower costs.
Moreover, as far as earnings surprise history is concerned, the Houston, TX-based upstream operator delivered an average positive earnings surprise of 62.4% in the trailing four quarters.
Let’s see how things are shaping up prior to the announcement.
Why a Likely Positive Surprise?
As we believe that improving realized prices will enhance earnings of the company, Apache’s high production growth from the Permian operations keeps us excited.
The analysts polled by Zacks envision the average price of oil from the Permian Basin in the first quarter of 2018 to come in at $60 per barrel. It is higher than the year-ago quarter’s figure of $49.16 per barrel and $53.22 per barrel in the fourth quarter of 2017. Average price of natural gas per thousand cubic feet (Mcf) is expected at $2.87, up 4.4% year over year.
The Zacks Consensus Estimate for natural gas production volume per day in the Permian Basin is 335 Mcf, higher than the year-ago period’s 228 Mcf and last reported quarter’s 320 Mcf. Moreover, natural gas volumes from the North America are expected at 456 Mcf per day, up 3.4% sequentially.
Additionally, the company expects its unrealized gain on oil and gas price derivatives (before tax) to be $49 million.
Earnings Whispers
Our proven model shows that Apache is likely to beat earnings estimates because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +0.29%. This is a very meaningful and leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Apache carries a Zacks Rank #3 (Hold), which when combined with +0.29% ESP makes us confident about an earnings beat.
Note that stocks with a Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Energy Stocks With Favorable Combination
Here are some other companies from the same sector, which according to our model have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Calgary, Canada-based Pembina Pipeline Corporation (PBA - Free Report) carries a Zacks Rank #1 and has an Earnings ESP of +3.87%. The company will report earnings on May 3.
Frisco, TX-based Comstock Resources, Inc. (CRK - Free Report) carries a Zacks Rank #2 and has an Earnings ESP of +51.83%. The company will report earnings on May 14.
Fort Worth, TX-based Emerge Energy Services LP has a Zacks Rank #3 and an Earnings ESP of +16.67%. The company will report earnings on May 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Apache (APA) Q1 Earnings: Will it Beat on Permian Strength?
Apache Corporation (APA - Free Report) is expected to beat expectations in first-quarter 2018 results, when it releases earnings on May 2, after the market closes. The current Zacks Consensus Estimate for the quarter under review is a profit of 27 cents on revenues of $1,640 million.
In the preceding three-month period, the company delivered a positive earnings surprise of 57.1% by reporting adjusted earnings of 33 cents per share against the Zacks Consensus Estimate of 21 cents. The outperformance stemmed from higher oil and gas realizations, and lower costs.
Moreover, as far as earnings surprise history is concerned, the Houston, TX-based upstream operator delivered an average positive earnings surprise of 62.4% in the trailing four quarters.
Apache Corporation Price and EPS Surprise
Apache Corporation Price and EPS Surprise | Apache Corporation Quote
Let’s see how things are shaping up prior to the announcement.
Why a Likely Positive Surprise?
As we believe that improving realized prices will enhance earnings of the company, Apache’s high production growth from the Permian operations keeps us excited.
The analysts polled by Zacks envision the average price of oil from the Permian Basin in the first quarter of 2018 to come in at $60 per barrel. It is higher than the year-ago quarter’s figure of $49.16 per barrel and $53.22 per barrel in the fourth quarter of 2017. Average price of natural gas per thousand cubic feet (Mcf) is expected at $2.87, up 4.4% year over year.
The Zacks Consensus Estimate for natural gas production volume per day in the Permian Basin is 335 Mcf, higher than the year-ago period’s 228 Mcf and last reported quarter’s 320 Mcf. Moreover, natural gas volumes from the North America are expected at 456 Mcf per day, up 3.4% sequentially.
Additionally, the company expects its unrealized gain on oil and gas price derivatives (before tax) to be $49 million.
Earnings Whispers
Our proven model shows that Apache is likely to beat earnings estimates because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +0.29%. This is a very meaningful and leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Apache carries a Zacks Rank #3 (Hold), which when combined with +0.29% ESP makes us confident about an earnings beat.
Note that stocks with a Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Energy Stocks With Favorable Combination
Here are some other companies from the same sector, which according to our model have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Calgary, Canada-based Pembina Pipeline Corporation (PBA - Free Report) carries a Zacks Rank #1 and has an Earnings ESP of +3.87%. The company will report earnings on May 3.
Frisco, TX-based Comstock Resources, Inc. (CRK - Free Report) carries a Zacks Rank #2 and has an Earnings ESP of +51.83%. The company will report earnings on May 14.
Fort Worth, TX-based Emerge Energy Services LP has a Zacks Rank #3 and an Earnings ESP of +16.67%. The company will report earnings on May 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>