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APA to Announce Q2 Earnings: What's in Store for the Stock?

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APA Corporation (APA - Free Report) is scheduled to release second-quarter 2021 results on Wednesday Aug 4, after the closing bell.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is 54 cents per share and for revenues is $1.55 billion.

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

Factors at Play

APA is expected to have benefited from increased commodity prices. The company anticipates average realized crude oil price in the United States for the June quarter to be $65 per barrel, indicating a 182.4% rise from the year-ago reported figure of $23.02. The same for natural gas and natural gas liquids in the United States is pegged at $2.70 per thousand cubic feet (Mcf) and $22.75 per barrel each, both increasing 139% and 191.3%, respectively, from the corresponding year-ago reported figures.

On a bearish note, APA expects its second-quarter adjusted total production to be 342 thousand barrels of oil equivalent per day (Mboe/d), indicating a 21.4% decline from the year-ago quarter’s reported figure of 435.4 Mboe/d. The Zacks Consensus Estimate for the same is pegged at 395 Mboe/d.

For second-quarter 2021, the company’s adjusted production at international levels is valued at 101 Mboe/d, implying a decline from184.9 Mboe/d reported a quarter ago. 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.

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 ESPand 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 54 cents per share each.

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

Highlights of Q1 Earnings & Surprise Record

In the last reported quarter, APA posted earnings per share — excluding one-time items — of 91 cents, beating the Zacks Consensus Estimate of 74 cents. However, the year-earlier quarter reported a loss of 13 cents per share. This outperformance reflects better-than-expected production and costs control. The average daily U.S. output came in at 210,091 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 208,000 BOE/d.

Revenues of $1.87 billion outpaced the Zacks Consensus Estimate of $1.53 billion million and also rose 46.1% from the year-ago quarter’s sales of $1.28 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 35.62%. 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:

The Williams Companies, Inc. (WMB - Free Report) has an Earnings ESP of +2.19% and a Zacks Rank #3, currently. The firm is scheduled to release earnings on Aug 2.

Viper Energy Partners LP (VNOM - Free Report) has an Earnings ESP of +71.11% and a Zacks Rank of 3, currently. The firm is scheduled to release earnings on Aug 2.

ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +24.21% and is a #3 Ranked player, presently. The firm is scheduled to release earnings on Aug 3.