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APA to Announce Q1 Earnings: What's in Store for the Stock?

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APA Corporation (APA - Free Report) is scheduled to release first-quarter 2021 results on Wednesday May 5, after the closing bell.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is 74 cents per share and for revenues is $1.53 billion.

Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the March quarter.

Factors at Play

On a bearish note, APA is likely to have faced the repercussions of mid-February’s Texas freeze, which was a weeklong spell of severe cold blast that affected the company’s drilling operations, causing loss of revenues and an incurrence of additional costs.

APA expects its first-quarter adjusted total production to be 324 thousand barrels of oil equivalent per day (Mboe/d), indicating a 30.8% decline from the year-ago quarter’s reported figure of 468 Mboe/d and missing the Zacks Consensus Estimate of 380 Mboe/d. This is largely due to the Permian Basin shut-ins that lasted for nine days during the recent freeze incident as well as the timing of the Permian DUC completions during the quarter.

For first-quarter 2021, the company’s adjusted production at international levels is valued at 116 Mboe/d compared with 120 Mboe/d mentioned previously. This is attributable to the production-sharing contracts associated with higher realized oil prices in Egypt and an extended maintenance downtime in the North Sea.

However, APA is expected to have benefited from improved commodity prices. The company anticipates average realized crude oil price in the United States for the March quarter to be $57 per barrel, indicating a 23.05% rise from the year-ago reported figure of $46.32. The same for natural gas and natural gas liquids in the United States is pegged at $4.40 per thousand cubic feet (Mcf) and $23 per barrel each, both increasing 528.6% and 140%, respectively, from the corresponding year-ago reported figures.

What Does Our Model Say?

Our proven model does not conclusively predict an earnings beat for APA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: APA has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 79 cents per share each.

Zacks Rank:  APA carries a Zacks Rank #2, currently. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Highlights of Q4 Earnings & Surprise Record

In the last reported quarter, APA posted a loss per share — excluding one-time items — of 5 cents, narrower than the Zacks Consensus Estimate of a loss of 8 cents. This outperformance reflects robust domestic production and limited costs. Precisely, the average daily U.S. output came in at 232,975 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 230,000 BOE/d. However, APA’s bottom line came against the year-earlier quarter's adjusted earnings of 8 cents due to extremely lower oil prices.

Revenues of $1.2 billion outpaced the Zacks Consensus Estimate of $1 billion million but fell 29.5% from the year-ago quarter’s sales of $1.7 billion.

As far as earnings surprises are concerned, this oil and gas producer’s bottom line beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 44.05%. This is depicted in the graph below:

APA Corporation Price and EPS Surprise

APA Corporation Price and EPS Surprise

APA Corporation price-eps-surprise | APA Corporation Quote

Stocks to Consider

While earnings outperformance looks uncertain for APA, here are some firms worth considering from the energy space, which according to our model have the perfect combination of ingredients to deliver a positive surprise this reporting cycle:

NuStar Energy L.P. (NS - Free Report) has an Earnings ESP of +19.72% and is Zacks #3 Ranked, presently. The firm is scheduled to release earnings on May 4.

PDC Energy, Inc. (PDCE - Free Report) has an Earnings ESP of +8.43% and a Zacks Rank #3, currently. The firm is scheduled to release earnings on May 5.

Pembina Pipeline Corp. (PBA - Free Report) has an Earnings ESP of +2.22% and is Zacks #3 Ranked, presently. The firm is scheduled to release earnings on May 6.

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