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APA Q4 Earnings Preview: This is What Investors Can Expect
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APA Corporation (APA - Free Report) is set to release fourth-quarter results on Feb 22. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.50 per share on revenues of $2.3 billion.
Let’s delve into the factors that might influence this upstream operator’s results in the December quarter. But it’s worth taking a look at APA’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the independent oil and gas explorer beat the consensus mark on strong production. APA had reported adjusted earnings per share of $1.97, above the Zacks Consensus Estimate of $1.92. Revenues of $2.9 billion generated by the firm also came in above the Zacks Consensus Estimate by 10.2%.
APA missed the Zacks Consensus Estimate for earnings in two of the last four quarters, resulting in a negative earnings surprise of 3.6%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 16.3% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a marginal 0.5% increase from the year-ago period.
Factors to Consider
APA is expected to have benefited from the strength in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for fourth-quarter average sales price for crude and natural gas is pegged at $88 per barrel and $5.69 per thousand cubic feet, respectively, up from a year earlier when the company had fetched $79 and $4.95. The year-over-year improvement in realizations has most likely buoyed APA’s revenues and cash flows.
The company is also expected to have reaped the reward of slightly higher oil production during the quarter. APA continues to churn out an impressive output from its assets in the United States, Egypt and the North Sea. Consequently, the consensus mark for APA’s crude volume is pegged at 193,000 barrels per day, up from the prior-year quarter’s level of around 179,000 barrels per day.
On a somewhat bearish note, the increase in APA’s costs might have dented the company’s to-be-reported bottom line. The company’s third-quarter lease operating expenses totaled $364 million, up 15.2% from the year-ago period. Moreover, total operating expenses rose 11.2% from the corresponding period of 2021 to $1.7 billion. The upward cost trajectory is likely to have continued in the fourth quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that APA is likely to beat estimates in the fourth quarter. 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -7.32%.
Zacks Rank: APA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for APA, here are some firms from the energy space that you may want to consider on the basis of our model:
ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +21.30% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 21.
For 2023, ProPetro Holding has a projected earnings growth rate of 596.1%. Valued at around $1.1 billion, PUMP has lost 23.2% in a year.
Par Pacific Holdings, Inc. (PARR - Free Report) has an Earnings ESP of +6.79% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 22.
For 2022, Par Pacific Holdings has a projected earnings growth rate of 539%. Valued at around $1.6 billion, PARR has gained 79.3% in a year.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2022, EOG has a projected earnings growth rate of 59%. Valued at around $69.6 billion, EOG has gained 6.1% in a year.
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APA Q4 Earnings Preview: This is What Investors Can Expect
APA Corporation (APA - Free Report) is set to release fourth-quarter results on Feb 22. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.50 per share on revenues of $2.3 billion.
Let’s delve into the factors that might influence this upstream operator’s results in the December quarter. But it’s worth taking a look at APA’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the independent oil and gas explorer beat the consensus mark on strong production. APA had reported adjusted earnings per share of $1.97, above the Zacks Consensus Estimate of $1.92. Revenues of $2.9 billion generated by the firm also came in above the Zacks Consensus Estimate by 10.2%.
APA missed the Zacks Consensus Estimate for earnings in two of the last four quarters, resulting in a negative earnings surprise of 3.6%, on average. This is depicted in the graph below:
APA Corporation Price and EPS Surprise
APA Corporation price-eps-surprise | APA Corporation Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 16.3% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a marginal 0.5% increase from the year-ago period.
Factors to Consider
APA is expected to have benefited from the strength in oil and natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for fourth-quarter average sales price for crude and natural gas is pegged at $88 per barrel and $5.69 per thousand cubic feet, respectively, up from a year earlier when the company had fetched $79 and $4.95. The year-over-year improvement in realizations has most likely buoyed APA’s revenues and cash flows.
The company is also expected to have reaped the reward of slightly higher oil production during the quarter. APA continues to churn out an impressive output from its assets in the United States, Egypt and the North Sea. Consequently, the consensus mark for APA’s crude volume is pegged at 193,000 barrels per day, up from the prior-year quarter’s level of around 179,000 barrels per day.
On a somewhat bearish note, the increase in APA’s costs might have dented the company’s to-be-reported bottom line. The company’s third-quarter lease operating expenses totaled $364 million, up 15.2% from the year-ago period. Moreover, total operating expenses rose 11.2% from the corresponding period of 2021 to $1.7 billion. The upward cost trajectory is likely to have continued in the fourth quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that APA is likely to beat estimates in the fourth quarter. 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -7.32%.
Zacks Rank: APA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for APA, here are some firms from the energy space that you may want to consider on the basis of our model:
ProPetro Holding Corp. (PUMP - Free Report) has an Earnings ESP of +21.30% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 21.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2023, ProPetro Holding has a projected earnings growth rate of 596.1%. Valued at around $1.1 billion, PUMP has lost 23.2% in a year.
Par Pacific Holdings, Inc. (PARR - Free Report) has an Earnings ESP of +6.79% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 22.
For 2022, Par Pacific Holdings has a projected earnings growth rate of 539%. Valued at around $1.6 billion, PARR has gained 79.3% in a year.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 23.
For 2022, EOG has a projected earnings growth rate of 59%. Valued at around $69.6 billion, EOG has gained 6.1% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.