APA Corporation (APA Quick QuoteAPA - Free Report) is set to release third-quarter results on Nov. 6. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of $1.03 per share on revenues of $2.3 billion.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let’s delve into the factors that might influence this upstream operator’s results for the September quarter. But it’s worth taking a look at APA’s previous-quarter performance first.

Highlights of Q2 Earnings & Surprise History

In the last reported quarter, the independent oil and gas explorer beat the consensus mark on higher-than-expected production owing to the contribution from the Callon Petroleum acquisition. APA reported adjusted earnings per share of $1.17, outpacing the Zacks Consensus Estimate of 95 cents by a considerable margin. Revenues of $2.8 billion beat the Zacks Consensus Estimate by more than 20%.

APA has a trailing four-quarter earnings surprise of 4.1%, on average, having surpassed the Zacks Consensus Estimate on two occasions and missing on the other two. This is depicted in the graph below:

Factors to Consider

APA  is expected to have benefited from higher domestic production during the third quarter. The company continues to churn out impressive volumes from its vast inventory of drill-ready locations in the Permian Basin — America's hottest and lowest-cost shale region. Consequently, our expectation for APA’s average third-quarter volume is pegged at 291,591 barrels of oil equivalent per day (BOE/d), up 29.2% from the year-ago level of 225,639 BOE/d. The quarterly production numbers also reflect contributions from the Callon Petroleum acquisition that was closed on April 1.

However, as a counter to the aforementioned factor, the company’s lease operating expense and property/equipment costs in the third quarter might have gone up. This, in turn, is likely to have affected overall earnings. In particular, our estimate for lease operating outgo and property/equipment expenses are pegged at $444.7 million and $590.3 million, indicating a 12.9% and 45% rise from the respective year-ago quarter figures.

On a further bearish note, lower year-over-year oil realizations might have dampened some of the positive impact. For the to-be-reported quarter, our model projections for APA’s average realized crude price are pegged at $73.90 per barrel, indicating a fall from the prior-year quarter’s selling price of $86.15 per barrel. This price decline is likely to have pulled down the revenues and cash flows of APA, as more than half of the company’s total production is oil.

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for APA Corporation for the third 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, is +2.33%.

Zacks Rank: APA currently carries a Zacks Rank #5 (Strong Sell).

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:

Sunoco LP (SUN Quick QuoteSUN - Free Report) has an Earnings ESP of +13.44% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov. 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

The 2024 Zacks Consensus Estimate for Sunoco indicates 154.3% year-over-year earnings per share growth. Valued at around $7.8 billion, SUN has lost 3.7% in a year.

TC Energy Corporation (TRP Quick QuoteTRP - Free Report) has an Earnings ESP of +3.07% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov. 7.

TC Energy has a trailing four-quarter earnings surprise of 12%, on average. Valued at around $48.1 billion, TRP has gained 27.7% in a year.

Helmerich & Payne (HP Quick QuoteHP - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov. 13.

Helmerich & Payne has a trailing four-quarter earnings surprise of 14.8%, on average. Valued at around $3.3 billion, HP has lost 19.9% in a year.