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Why Is Apache Corp (APA) Down 5.2% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Apache Corporation (APA - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Apache reported a fourth-quarter loss per share – excluding one-time items – of $0.06, contrary to the Zacks Consensus Estimate for a profit of $0.06. The underperformance stems from a dip in output due to a conservative capital budget.
However, the bottom line improved from the year-ago adjusted loss of $0.38 amid cost savings and higher realizations.
Revenues of $1,451 million were below the Zacks Consensus Estimate of $1,489 million and the fourth-quarter 2015 sales of $1,482 million.
Operational Performance
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 420,846 oil-equivalent barrels per day (BOE/d) (64% liquids), down 14% from last year. Apache’s production for oil and natural gas liquids (NGLs) was 271,074 barrels per day (Bbl/d), while natural gas output came in at 898.6 million cubic feet per day (MMcf/d).
The average realized crude oil price during the fourth quarter was $47.39 per barrel, representing an increase of 19% from the year-ago realization of $39.79. Moreover, the average realized natural gas price during the Dec quarter of 2016 was $2.85 per thousand cubic feet (Mcf), up 8% from the year-ago period.
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Dec 31, 2016, Apache had approximately $1,377 million in cash and cash equivalents. The company had a long-term debt of $8,544 million, representing a debt-to-capitalization ratio of 57.8%.
During Oct-Dec period, Apache’s exploration and development investments totaled $112 million, 85% lower than the $735 million incurred a year ago. The company – like many other oil and gas players – aligned its spending plans with the low oil price environment.
Apache’s fourth quarter lease operating expenses totaled $375 million, down 18% from the year-ago quarter. Total costs and expenses fell 77% from the fourth quarter of 2015 to $1,565 million.
Guidance:
After following a disciplined capital allocation program over the past 2 years, Apache is now looking to shift its strategic objective. With returns-focused growth in mind, Apache announced a 2017 capital budget of $3.1 billion, representing a 60% increase over its 2016 spend. The company also aims to grow production by approximately 10% in the 2017-2018 period.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been two upward revisions for the current quarter compared to two downward. In the past month, the consensus estimate has shifted downward by nearly 8% due to these changes.
At this time, Apache Corp.'s stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Apache Corp (APA) Down 5.2% Since the Last Earnings Report?
A month has gone by since the last earnings report for Apache Corporation (APA - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Apache reported a fourth-quarter loss per share – excluding one-time items – of $0.06, contrary to the Zacks Consensus Estimate for a profit of $0.06. The underperformance stems from a dip in output due to a conservative capital budget.
However, the bottom line improved from the year-ago adjusted loss of $0.38 amid cost savings and higher realizations.
Revenues of $1,451 million were below the Zacks Consensus Estimate of $1,489 million and the fourth-quarter 2015 sales of $1,482 million.
Operational Performance
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 420,846 oil-equivalent barrels per day (BOE/d) (64% liquids), down 14% from last year. Apache’s production for oil and natural gas liquids (NGLs) was 271,074 barrels per day (Bbl/d), while natural gas output came in at 898.6 million cubic feet per day (MMcf/d).
The average realized crude oil price during the fourth quarter was $47.39 per barrel, representing an increase of 19% from the year-ago realization of $39.79. Moreover, the average realized natural gas price during the Dec quarter of 2016 was $2.85 per thousand cubic feet (Mcf), up 8% from the year-ago period.
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Dec 31, 2016, Apache had approximately $1,377 million in cash and cash equivalents. The company had a long-term debt of $8,544 million, representing a debt-to-capitalization ratio of 57.8%.
During Oct-Dec period, Apache’s exploration and development investments totaled $112 million, 85% lower than the $735 million incurred a year ago. The company – like many other oil and gas players – aligned its spending plans with the low oil price environment.
Apache’s fourth quarter lease operating expenses totaled $375 million, down 18% from the year-ago quarter. Total costs and expenses fell 77% from the fourth quarter of 2015 to $1,565 million.
Guidance:
After following a disciplined capital allocation program over the past 2 years, Apache is now looking to shift its strategic objective. With returns-focused growth in mind, Apache announced a 2017 capital budget of $3.1 billion, representing a 60% increase over its 2016 spend. The company also aims to grow production by approximately 10% in the 2017-2018 period.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been two upward revisions for the current quarter compared to two downward. In the past month, the consensus estimate has shifted downward by nearly 8% due to these changes.
Apache Corporation Price and Consensus
Apache Corporation Price and Consensus | Apache Corporation Quote
VGM Scores
At this time, Apache Corp.'s stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.