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APA Shares Pop Since Witnessing a Beat on Q4 Earnings
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The stock of U.S. energy operator APA Corporation (APA - Free Report) has gained 3.4% since its fourth-quarter earnings announcement on Feb 22. The positive response could be attributed to the company’s earnings beat and shareholder-firendly initiatives.
What Did APA’s Earnings Unveil?
APA reported fourth-quarter 2022 adjusted earnings of $1.48 per share, beating the Zacks Consensus Estimate of $1.44 and increasing from the year-ago quarter’s income of $1.29.
The quarterly numbers reflect a lower operating expense and higher-than-expected production. Precisely, the average daily output came in at 414,435 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 405,000 BOE/d.
Revenues of $2.4 billion outpaced the Zacks Consensus Estimate of $2.3 billion but edged down 1% from the year-ago quarter’s sales due to sharply lower gas realizations.
As promised, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. APA bought back 12.1 million shares at $44.40 apiece during the fourth quarter. The company also shelled out $80 million in dividend payment.
Production of oil and natural gas averaged 414,435 BOE/d, which comprises 64% liquids. The figure increased 7.5% from the year-ago quarter.
U.S. output (accounting for 53% of the total) fell 4.5% year over year to 217,830 BOE/d but production from the company’s international operations increased some 24.7% to 196,605 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 267,073 barrels per day (Bbl/d). Natural gas output totaled 884,169 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the fourth quarter was $86.17 per barrel, up 9.7% from the year-ago realization of $78.52. However, the number came below the Zacks Consensus Estimate of $88. Meanwhile, the average realized natural gas price fell to $4.04 per thousand cubic feet (Mcf) from $4.95 in the year-ago period and badly missed the consensus mark of $5.69.
Costs & Financial Position
APA’s fourth-quarter lease operating expenses totaled $377 million, up 7.7% from the year-ago period. However, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 9.8% from the corresponding period of 2021 to $1.6 billion.
During the quarter under review, APA generated $1.4 billion of cash from operating activities while it incurred $486 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1 billion in the fourth quarter. It also registered a free cash flow of $360 million during the period, though it was down from $466 million a year ago.
As of Dec 31, APA had approximately $245 million in cash and cash equivalents, and $5.5 billion in long-term debt. The debt-to-capitalization ratio of the company was 80.2.
Guidance
APA expects adjusted production to average 312,000-314,000 BOE/d in Q1 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 147,000 Bbl/d and 159,000 Bbl/d for Q1 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year between $2 billion and $2.1 billion. APA has committed to return at least 60% of free cash flow to its shareholders.
Zacks Rank & Stock Picks
APA — an upstream oil and gas company with operations in the United States, Egypt and in the North Sea of the United Kingdom — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like NOW Inc. (DNOW - Free Report) , Valero Energy (VLO - Free Report) and Sunoco LP (SUN - Free Report) , each carrying a Zacks Rank #1 (Strong Buy) currently.
NOW Inc.: DNOW beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. NOW Inc. has a trailing four-quarter earnings surprise of 41.3%, on average.
DNOW is valued at around $1.4 billion. NOW Inc. has seen its shares gain 15.9% in a year.
Valero Energy: Valero Energy is valued at some $51.9 billion. The Zacks Consensus Estimate for VLO’s 2023 earnings has been revised 3.2% upward over the past 30 days.
Valero Energy, headquartered in San Antonio, TX, beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. VLO shares have gained 57.2% in a year.
Sunoco LP: SUN beat the Zacks Consensus Estimate for earnings twice in the trailing four quarters. Sunoco has a trailing four-quarter earnings surprise of 21.6%, on average.
Sunoco is valued at around $4.6 billion. SUN has seen its shares gain 8% in a year.
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APA Shares Pop Since Witnessing a Beat on Q4 Earnings
The stock of U.S. energy operator APA Corporation (APA - Free Report) has gained 3.4% since its fourth-quarter earnings announcement on Feb 22. The positive response could be attributed to the company’s earnings beat and shareholder-firendly initiatives.
What Did APA’s Earnings Unveil?
APA reported fourth-quarter 2022 adjusted earnings of $1.48 per share, beating the Zacks Consensus Estimate of $1.44 and increasing from the year-ago quarter’s income of $1.29.
The quarterly numbers reflect a lower operating expense and higher-than-expected production. Precisely, the average daily output came in at 414,435 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 405,000 BOE/d.
Revenues of $2.4 billion outpaced the Zacks Consensus Estimate of $2.3 billion but edged down 1% from the year-ago quarter’s sales due to sharply lower gas realizations.
As promised, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. APA bought back 12.1 million shares at $44.40 apiece during the fourth quarter. The company also shelled out $80 million in dividend payment.
APA Corporation Price, Consensus and EPS Surprise
APA Corporation price-consensus-eps-surprise-chart | APA Corporation Quote
Production & Selling Prices
Production of oil and natural gas averaged 414,435 BOE/d, which comprises 64% liquids. The figure increased 7.5% from the year-ago quarter.
U.S. output (accounting for 53% of the total) fell 4.5% year over year to 217,830 BOE/d but production from the company’s international operations increased some 24.7% to 196,605 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 267,073 barrels per day (Bbl/d). Natural gas output totaled 884,169 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the fourth quarter was $86.17 per barrel, up 9.7% from the year-ago realization of $78.52. However, the number came below the Zacks Consensus Estimate of $88. Meanwhile, the average realized natural gas price fell to $4.04 per thousand cubic feet (Mcf) from $4.95 in the year-ago period and badly missed the consensus mark of $5.69.
Costs & Financial Position
APA’s fourth-quarter lease operating expenses totaled $377 million, up 7.7% from the year-ago period. However, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 9.8% from the corresponding period of 2021 to $1.6 billion.
During the quarter under review, APA generated $1.4 billion of cash from operating activities while it incurred $486 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1 billion in the fourth quarter. It also registered a free cash flow of $360 million during the period, though it was down from $466 million a year ago.
As of Dec 31, APA had approximately $245 million in cash and cash equivalents, and $5.5 billion in long-term debt. The debt-to-capitalization ratio of the company was 80.2.
Guidance
APA expects adjusted production to average 312,000-314,000 BOE/d in Q1 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 147,000 Bbl/d and 159,000 Bbl/d for Q1 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year between $2 billion and $2.1 billion. APA has committed to return at least 60% of free cash flow to its shareholders.
Zacks Rank & Stock Picks
APA — an upstream oil and gas company with operations in the United States, Egypt and in the North Sea of the United Kingdom — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like NOW Inc. (DNOW - Free Report) , Valero Energy (VLO - Free Report) and Sunoco LP (SUN - Free Report) , each carrying a Zacks Rank #1 (Strong Buy) currently.
You can see the complete list of today’s Zacks #1 Rank stocks here.
NOW Inc.: DNOW beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. NOW Inc. has a trailing four-quarter earnings surprise of 41.3%, on average.
DNOW is valued at around $1.4 billion. NOW Inc. has seen its shares gain 15.9% in a year.
Valero Energy: Valero Energy is valued at some $51.9 billion. The Zacks Consensus Estimate for VLO’s 2023 earnings has been revised 3.2% upward over the past 30 days.
Valero Energy, headquartered in San Antonio, TX, beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. VLO shares have gained 57.2% in a year.
Sunoco LP: SUN beat the Zacks Consensus Estimate for earnings twice in the trailing four quarters. Sunoco has a trailing four-quarter earnings surprise of 21.6%, on average.
Sunoco is valued at around $4.6 billion. SUN has seen its shares gain 8% in a year.