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Why Is APA (APA) Up 5.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for APA (APA - Free Report) . Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is APA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
APA Q2 Earnings Top Estimate, Sales Miss
APA reported second-quarter 2023 adjusted earnings of 85 cents per share, beating the Zacks Consensus Estimate of 66 cents. The outperformance primarily reflects lower operating expenses and strong production.
However, the bottom line dropped from the year-ago adjusted figure of $2.37 due to significantly lower oil prices.
Revenues of $2 billion missed the Zacks Consensus Estimate of $1.8 billion and were down 35.7% 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 1.3 million shares at $33.72 apiece during the second quarter. The company also shelled out $77 million in dividend payment.
Production & Selling Prices
Production of oil and natural gas averaged 398,930 BOE/d, which comprises 66% liquids. The figure increased 3.7% from the year-ago quarter but fell marginally short of our expectation of 399,140 BOE/d.
U.S. output (accounting for 65% of the total) rose 6.3% year over year to 212,786 BOE/d, while production from the company’s international operations increased a marginal 1% to 186,144 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 261,463 barrels per day (Bbl/d). Natural gas output totaled 824,807 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $76.38 per barrel, down 32.9% from the year-ago realization of $113.79. The number also came below our projection of $78.33. Meanwhile, the average realized natural gas price fell to $2.39 per thousand cubic feet (Mcf) from $5.65 in the year-ago period and missed our estimates of $2.45.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $361 million, up marginally from the year-ago period’s figure of $359 million. However, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 20.7% from the corresponding period of 2022 to $1.3 billion. Our model put the figure at $1.2 billion.
During the quarter under review, APA generated $1 billion of cash from operating activities while it incurred $516 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $768 million in the second quarter. It also registered a free cash flow of $94 million during the period, though it plunged from $814 million a year ago.
As of Jun 30, APA had approximately $142 million in cash and cash equivalents and $5.6 billion in long-term debt. The debt-to-capitalization ratio of the company was 76.7.
Guidance
APA expects adjusted production to average 337,000-339,000 BOE/d in Q3 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 159,000-161,000 Bbl/d and 159,000 Bbl/d for Q3 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year at $1.9 billion. APA is committed to returning at least 60% of free cash flow to its shareholders.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted 10.26% due to these changes.
VGM Scores
At this time, APA has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
APA belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Gulfport Energy (GPOR - Free Report) , has gained 13.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Gulfport reported revenues of $304.71 million in the last reported quarter, representing a year-over-year change of -34.5%. EPS of $1.85 for the same period compares with $5.09 a year ago.
For the current quarter, Gulfport is expected to post earnings of $2.36 per share, indicating a change of -36% from the year-ago quarter. The Zacks Consensus Estimate has changed -17.9% over the last 30 days.
Gulfport has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is APA (APA) Up 5.2% Since Last Earnings Report?
A month has gone by since the last earnings report for APA (APA - Free Report) . Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is APA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
APA Q2 Earnings Top Estimate, Sales Miss
APA reported second-quarter 2023 adjusted earnings of 85 cents per share, beating the Zacks Consensus Estimate of 66 cents. The outperformance primarily reflects lower operating expenses and strong production.
However, the bottom line dropped from the year-ago adjusted figure of $2.37 due to significantly lower oil prices.
Revenues of $2 billion missed the Zacks Consensus Estimate of $1.8 billion and were down 35.7% 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 1.3 million shares at $33.72 apiece during the second quarter. The company also shelled out $77 million in dividend payment.
Production & Selling Prices
Production of oil and natural gas averaged 398,930 BOE/d, which comprises 66% liquids. The figure increased 3.7% from the year-ago quarter but fell marginally short of our expectation of 399,140 BOE/d.
U.S. output (accounting for 65% of the total) rose 6.3% year over year to 212,786 BOE/d, while production from the company’s international operations increased a marginal 1% to 186,144 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 261,463 barrels per day (Bbl/d). Natural gas output totaled 824,807 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $76.38 per barrel, down 32.9% from the year-ago realization of $113.79. The number also came below our projection of $78.33. Meanwhile, the average realized natural gas price fell to $2.39 per thousand cubic feet (Mcf) from $5.65 in the year-ago period and missed our estimates of $2.45.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $361 million, up marginally from the year-ago period’s figure of $359 million. However, a significant decline in costs of oil and gas purchased meant that total operating expenses fell 20.7% from the corresponding period of 2022 to $1.3 billion. Our model put the figure at $1.2 billion.
During the quarter under review, APA generated $1 billion of cash from operating activities while it incurred $516 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $768 million in the second quarter. It also registered a free cash flow of $94 million during the period, though it plunged from $814 million a year ago.
As of Jun 30, APA had approximately $142 million in cash and cash equivalents and $5.6 billion in long-term debt. The debt-to-capitalization ratio of the company was 76.7.
Guidance
APA expects adjusted production to average 337,000-339,000 BOE/d in Q3 and 330,000-334,000 BOE/d in 2023. Of this, oil volumes are likely to be 159,000-161,000 Bbl/d and 159,000 Bbl/d for Q3 and 2023, respectively. Meanwhile, the company pegged its upstream capital expenditure for the year at $1.9 billion. APA is committed to returning at least 60% of free cash flow to its shareholders.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted 10.26% due to these changes.
VGM Scores
At this time, APA has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
APA belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Gulfport Energy (GPOR - Free Report) , has gained 13.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Gulfport reported revenues of $304.71 million in the last reported quarter, representing a year-over-year change of -34.5%. EPS of $1.85 for the same period compares with $5.09 a year ago.
For the current quarter, Gulfport is expected to post earnings of $2.36 per share, indicating a change of -36% from the year-ago quarter. The Zacks Consensus Estimate has changed -17.9% over the last 30 days.
Gulfport has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.