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APA Stock Stumbles Since Witnessing a Beat on Q1 Earnings
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The stock of U.S. energy operator APA Corporation (APA - Free Report) has lost 4.7% since its first-quarter earnings announcement on May 3. In addition to the ongoing pressure on oil prices, the negative response could be attributed to the company’s lower earnings compared to the corresponding quarter of 2022.
What Did APA’s Earnings Unveil?
APA reported first-quarter 2023 adjusted earnings of $1.19 per share, beating the Zacks Consensus Estimate of 98 cents. The outperformance primarily reflects lower operating expenses and higher-than-expected production. Precisely, the average daily output came in at 394,249 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 389,000 BOE/d.
However, the bottom line dropped from the year-ago adjusted figure of $1.92 due to significantly lower oil prices.
Revenues of $2 billion outpaced the Zacks Consensus Estimate of $1.9 billion but were down 47% from the year-ago quarter’s sales.
As promised, the company is using the excess cash to reward shareholders with dividends and buybacks. APA bought back 3.7 million shares at $38.93 apiece during the first quarter. The company also shelled out $78 million in dividend payment.
Production of oil and natural gas averaged 394,249 BOE/d, which comprises 65% liquids. The figure decreased 2.4% from the year-ago quarter.
U.S. output (accounting for 51% of the total) fell 4.4% year over year to 201,580 BOE/d, while production from the company’s international operations decreased a marginal 0.2% to 192,669 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 254,543 barrels per day (Bbl/d). Natural gas output totaled 838,237 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the first quarter was $78.37 per barrel, down 21.8% from the year-ago realization of $100.23. The number also came below the Zacks Consensus Estimate of $79. Meanwhile, the average realized natural gas price fell to $3.22 per thousand cubic feet (Mcf) from $4.70 in the year-ago period but beat the consensus mark of $3.
Costs & Financial Position
APA’s first-quarter lease operating expenses totaled $321 million, down 6.7% from the year-ago period. Moreover, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 20.3% from the corresponding period of 2022 to $1.2 billion.
During the quarter under review, APA generated $335 million of cash from operating activities while it incurred $495 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $846 million in the first quarter. It also registered a free cash flow of $272 million during the period, though it was down from $675 million a year ago.
As of Mar 31, APA had approximately $154 million in cash and cash equivalents, and $5.8 billion in long-term debt. The debt-to-capitalization ratio of the company was 92.9.
Guidance
APA expects adjusted production to average 323,000-325,000 BOE/d in Q2 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 150,000 Bbl/d and 159,000 Bbl/d for Q2 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year between $1.9 billion and $2 billion. APA is committed to returning 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) , Murphy USA (MUSA - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) , each carrying a Zacks Rank #2 (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 32.1%, on average.
DNOW is valued at around $958.5 million. NOW Inc. has seen its shares gain 19.6% in a year.
Murphy USA: Murphy USA is valued at some $6.1 billion. The Zacks Consensus Estimate for MUSA’s 2023 earnings has been revised 2.2% upward over the past 30 days.
Murphy USA, headquartered in El Dorado, AR, beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. MUSA shares have gained 17.6% in a year.
Dril-Quip: Dril-Quip beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. DRQ has a trailing four-quarter earnings surprise of 119.8%, on average.
Dril-Quip is valued at around $793.5 million. DRQ has seen its shares fall 20.4% in a year.
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APA Stock Stumbles Since Witnessing a Beat on Q1 Earnings
The stock of U.S. energy operator APA Corporation (APA - Free Report) has lost 4.7% since its first-quarter earnings announcement on May 3. In addition to the ongoing pressure on oil prices, the negative response could be attributed to the company’s lower earnings compared to the corresponding quarter of 2022.
What Did APA’s Earnings Unveil?
APA reported first-quarter 2023 adjusted earnings of $1.19 per share, beating the Zacks Consensus Estimate of 98 cents. The outperformance primarily reflects lower operating expenses and higher-than-expected production. Precisely, the average daily output came in at 394,249 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 389,000 BOE/d.
However, the bottom line dropped from the year-ago adjusted figure of $1.92 due to significantly lower oil prices.
Revenues of $2 billion outpaced the Zacks Consensus Estimate of $1.9 billion but were down 47% from the year-ago quarter’s sales.
As promised, the company is using the excess cash to reward shareholders with dividends and buybacks. APA bought back 3.7 million shares at $38.93 apiece during the first quarter. The company also shelled out $78 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 394,249 BOE/d, which comprises 65% liquids. The figure decreased 2.4% from the year-ago quarter.
U.S. output (accounting for 51% of the total) fell 4.4% year over year to 201,580 BOE/d, while production from the company’s international operations decreased a marginal 0.2% to 192,669 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 254,543 barrels per day (Bbl/d). Natural gas output totaled 838,237 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the first quarter was $78.37 per barrel, down 21.8% from the year-ago realization of $100.23. The number also came below the Zacks Consensus Estimate of $79. Meanwhile, the average realized natural gas price fell to $3.22 per thousand cubic feet (Mcf) from $4.70 in the year-ago period but beat the consensus mark of $3.
Costs & Financial Position
APA’s first-quarter lease operating expenses totaled $321 million, down 6.7% from the year-ago period. Moreover, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 20.3% from the corresponding period of 2022 to $1.2 billion.
During the quarter under review, APA generated $335 million of cash from operating activities while it incurred $495 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $846 million in the first quarter. It also registered a free cash flow of $272 million during the period, though it was down from $675 million a year ago.
As of Mar 31, APA had approximately $154 million in cash and cash equivalents, and $5.8 billion in long-term debt. The debt-to-capitalization ratio of the company was 92.9.
Guidance
APA expects adjusted production to average 323,000-325,000 BOE/d in Q2 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 150,000 Bbl/d and 159,000 Bbl/d for Q2 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year between $1.9 billion and $2 billion. APA is committed to returning 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) , Murphy USA (MUSA - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) , each carrying a Zacks Rank #2 (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 32.1%, on average.
DNOW is valued at around $958.5 million. NOW Inc. has seen its shares gain 19.6% in a year.
Murphy USA: Murphy USA is valued at some $6.1 billion. The Zacks Consensus Estimate for MUSA’s 2023 earnings has been revised 2.2% upward over the past 30 days.
Murphy USA, headquartered in El Dorado, AR, beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. MUSA shares have gained 17.6% in a year.
Dril-Quip: Dril-Quip beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. DRQ has a trailing four-quarter earnings surprise of 119.8%, on average.
Dril-Quip is valued at around $793.5 million. DRQ has seen its shares fall 20.4% in a year.