A month has gone by since the last earnings report for Apache (APA Quick QuoteAPA - Free Report) . Shares have lost about 8.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Apache due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Apache’s Reports Narrower-Than-Expected Q2 Loss, Revenues Top

Apache Corporationreported second-quarter 2020 loss per share — excluding one-time items — of 74 cents, narrower than the Zacks Consensus Estimate of a loss of 99 cents. This better-than-expected result is led by higher-than-anticipated production volumes. Precisely, the average daily production came in at 435,448 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 428,000 BOE/d.

However, the bottom line came against the year-ago quarter’s earnings of 11 cents per share due to weak oil price realizations.

Although revenues of $752 million outpaced the Zacks Consensus Estimate of $701 million, the same fell 53.1% from the year-ago quarter’s sales of $1.60 billion.

In a separate press release, management informed about a key find at Kwaskwasi-1, the company's most precious well to date and its third successive exploit at Block 58. Post closure of drilling activities at Kwaskwasi-1, a fourth exploration prospect, Keskesi East-1, will be drilled nearly 10 kilometers to the southeast of the Sapakara discovery well.

Production & Selling Prices

Production of oil and natural gas averaged 435,448 BOE/d, which comprises 67.45% liquids. The figure slid 4.3% from the year-ago quarter due to an unimpressive contribution from the United States.

The U.S. output (accounting for 63.56% of the total) dipped 5.08% year over year to 250,589 BOE/d while the company’s international operations increased 9.2% to 143,657 BOE/d. Apache’s production for oil and natural gas liquids (NGLs) was 293,727 barrels per day (Bbl/d). Natural gas output totaled 850,329 thousand cubic feet per day (Mcf/d).

During the second quarter, Apache reduced 28,000 BOE/d of its production to lower the negative cash flow impacts of the plunge in oil and NGL prices. The company also curtailed an additional 7,000BOE/d of output due to the unscheduled pipeline downtime at Alpine High.

The average realized crude oil price during the second quarter was $25.77 per barrel, down 60% from the year-ago realization of $63.71. The number also fell short of the Zacks Consensus Estimate of $27.74. However, the average realized natural gas price improved to $1.68 per thousand cubic feet (Mcf) from $1.41 in the year-ago period and also came ahead of the Zacks Consensus Estimate of $1.53.

Costs & Financial Position

Apache’s second-quarter lease operating expenses totaled $264 million, down 32% from the year-ago period. Moreover, total operating expenses declined 42.8% from the corresponding period of 2019 to $1.01 billion. This was mainly on account of lower depreciation & amortization expenses and decreased costs related to asset impairment.

During the quarter under review, Apache generated $84 million of cash from operating activities while it invested $216 million as capital expenditures. The company reported an adjusted operating cash flow of $150 million in the second quarter.

As of Jun 30, this oil giant had approximately $135 million in cash and cash equivalents. Meanwhile, Apache had a long-term debt of $8.03 billion.

Guidance

This Houston, TX-based explorer and producer is expected to match the lower end of its annual capital view of $1.0-$1.2 billion dollars. The company projects third-quarter 2020 capital investment to be approximately $190 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 15.21% due to these changes.

VGM Scores

Currently, Apache has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Apache has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.