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APA Q2 Earnings Shine With Beat on Both Top and Bottom Lines
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Key Takeaways
APA's Q2 earnings and revenues exceeded estimates on higher-than-expected production.
Cost reductions helped offset lower oil prices and weaker U.S. output in the quarter.
The company returned $140M to shareholders through dividends and buybacks.
U.S. energy operator APA Corporation (APA - Free Report) reported second-quarter 2025 adjusted earnings of 87 cents per share, beating the Zacks Consensus Estimate of 45 cents. The outperformance primarily reflects higher-than-expected production and lower costs.
The bottom line fell from the year-ago adjusted profit of $1.17 due to lower oil realizations.
Revenues of $2.6 billion were down 6.4% from the year-ago quarter’s sales but came ahead of the Zacks Consensus Estimate by more than 26%.
Meanwhile, APA continues to reward its shareholders, having paid out $140 million in dividends and buybacks during the quarter.
Production of oil and natural gas averaged 465,078 BOE/d, which comprised 68% liquids. The figure was down 1.8% from the year-ago quarter but surpassed our expectation of 457,000 BOE/d.
U.S. output (accounting for 62% of the total) fell 4.5% year over year to 289,902 BOE/d, but production from the company’s international operations increased 3% to 175,176 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 316,062 barrels per day (Bbl/d). Natural gas output totaled 894,099 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $65.58 per barrel, down 20.3% from the year-ago realization of $82.28. However, the number came above our projection of $56.07. Meanwhile, the average realized natural gas price rose to $2.28 per thousand cubic feet (Mcf) from $1.77 in the year-ago period but missed our estimate of $2.35.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $367 million, down 20.2% from $460 million in the year-ago period. Moreover, a 10.1% drop in the cost of oil/gas equipment and lower depreciation outgo meant that total operating expenses decreased 15% from the corresponding period of 2024 to $1.6 billion. Our model had put the figure at $1.5 billion.
During the quarter under review, APA generated $1.2 billion of cash from operating activities while it incurred $648 million in upstream capital expenditures. The Zacks Rank #3 (Hold) company reported an adjusted operating cash flow of $981 million. It also registered a free cash flow of $134 million compared to $103 million a year ago.
As of June 30, APA had approximately $107 million in cash and cash equivalents and $4.3 billion in long-term debt, representing a debt-to-capitalization of 42.1%.
Guidance
APA expects production to average 448,000 BOE/d in Q3 and 457000 BOE/d in 2025 (up 0.5% year over year). Of this, oil volumes are likely to be 228,000 Bbl/d during the July-September period and 232,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.315-$2.365 billion compared to $2.225 billion-$2.325 billion before.
Some Key E&P Earnings
While we have discussed APA’s second-quarter results in detail, let’s see how some other upstream companies have fared this earnings season.
Shale-focused operator EOG Resources (EOG - Free Report) reported second-quarter adjusted EPS of $2.32, which beat the Zacks Consensus Estimate of $2.21 but decreased from the year-ago quarter’s $3.16. EOG’s results were driven by higher oil-equivalent production volumes. This was partially offset by lower price realization.
As of June 30, 2025, EOG Resources had cash and cash equivalents worth $5.2 billion and long-term debt of $3.5 billion. The current portion of the long-term debt totaled $778 million. In the reported quarter, the company generated $973 million in free cash flow. Capital expenditure amounted to $1.52 billion.
ConocoPhillips (COP - Free Report) , one of the world’s largest independent oil and gas producers, reported adjusted EPS of $1.42, which beat the Zacks Consensus Estimate of $1.36. The bottom line decreased from the prior-year level of $1.98. ConocoPhillips’ better-than-expected quarterly earnings can be attributed to higher oil equivalent production volumes. The positives, however, were partially counterbalanced by decreased average realized oil equivalent prices and increased total costs and expenses.
As of June 30, ConocoPhillips had $4.9 billion in cash and cash equivalents. The company had a total long-term debt of $23.1 billion and a short-term debt of $414 million as of the same date. Capital expenditure and investments totaled $3.29 billion. Net cash provided by operating activities was $3.5 billion.
Natural gas producer EQT Corporation (EQT - Free Report) reported adjusted EPS of 45 cents per share, which beat the Zacks Consensus Estimate of 44 cents and improved from the year-ago reported loss of 8 cents. The strong quarterly earnings were driven by higher sales volume and increased average realized prices. In the June quarter, EQT produced 568.2 billion cubic feet (Bcfe) of natural gas, higher than 507.5 Bcfe in the prior-year quarter. The production volumes, however, marginally missed our estimate of 569.3 Bcfe.
Natural gas contributed about 94% of EQT’s total production, amounting to 534.4 Bcf. Although this was slightly below our estimate of 535.3 Bcf, it increased from the previous year's 474.1 Bcf. The year-over-year growth was driven by strong well performance.
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APA Q2 Earnings Shine With Beat on Both Top and Bottom Lines
Key Takeaways
U.S. energy operator APA Corporation (APA - Free Report) reported second-quarter 2025 adjusted earnings of 87 cents per share, beating the Zacks Consensus Estimate of 45 cents. The outperformance primarily reflects higher-than-expected production and lower costs.
The bottom line fell from the year-ago adjusted profit of $1.17 due to lower oil realizations.
Revenues of $2.6 billion were down 6.4% from the year-ago quarter’s sales but came ahead of the Zacks Consensus Estimate by more than 26%.
Meanwhile, APA continues to reward its shareholders, having paid out $140 million in dividends and buybacks during the quarter.
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 465,078 BOE/d, which comprised 68% liquids. The figure was down 1.8% from the year-ago quarter but surpassed our expectation of 457,000 BOE/d.
U.S. output (accounting for 62% of the total) fell 4.5% year over year to 289,902 BOE/d, but production from the company’s international operations increased 3% to 175,176 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 316,062 barrels per day (Bbl/d). Natural gas output totaled 894,099 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the second quarter was $65.58 per barrel, down 20.3% from the year-ago realization of $82.28. However, the number came above our projection of $56.07. Meanwhile, the average realized natural gas price rose to $2.28 per thousand cubic feet (Mcf) from $1.77 in the year-ago period but missed our estimate of $2.35.
Costs & Financial Position
APA’s second-quarter lease operating expenses totaled $367 million, down 20.2% from $460 million in the year-ago period. Moreover, a 10.1% drop in the cost of oil/gas equipment and lower depreciation outgo meant that total operating expenses decreased 15% from the corresponding period of 2024 to $1.6 billion. Our model had put the figure at $1.5 billion.
During the quarter under review, APA generated $1.2 billion of cash from operating activities while it incurred $648 million in upstream capital expenditures. The Zacks Rank #3 (Hold) company reported an adjusted operating cash flow of $981 million. It also registered a free cash flow of $134 million compared to $103 million a year ago.
You can see the complete list of today’s Zacks #1 Rank stocks here.
As of June 30, APA had approximately $107 million in cash and cash equivalents and $4.3 billion in long-term debt, representing a debt-to-capitalization of 42.1%.
Guidance
APA expects production to average 448,000 BOE/d in Q3 and 457000 BOE/d in 2025 (up 0.5% year over year). Of this, oil volumes are likely to be 228,000 Bbl/d during the July-September period and 232,000 Bbl/d for the full year. The company pegged its upstream capital expenditure for the year at $2.315-$2.365 billion compared to $2.225 billion-$2.325 billion before.
Some Key E&P Earnings
While we have discussed APA’s second-quarter results in detail, let’s see how some other upstream companies have fared this earnings season.
Shale-focused operator EOG Resources (EOG - Free Report) reported second-quarter adjusted EPS of $2.32, which beat the Zacks Consensus Estimate of $2.21 but decreased from the year-ago quarter’s $3.16. EOG’s results were driven by higher oil-equivalent production volumes. This was partially offset by lower price realization.
As of June 30, 2025, EOG Resources had cash and cash equivalents worth $5.2 billion and long-term debt of $3.5 billion. The current portion of the long-term debt totaled $778 million. In the reported quarter, the company generated $973 million in free cash flow. Capital expenditure amounted to $1.52 billion.
ConocoPhillips (COP - Free Report) , one of the world’s largest independent oil and gas producers, reported adjusted EPS of $1.42, which beat the Zacks Consensus Estimate of $1.36. The bottom line decreased from the prior-year level of $1.98. ConocoPhillips’ better-than-expected quarterly earnings can be attributed to higher oil equivalent production volumes. The positives, however, were partially counterbalanced by decreased average realized oil equivalent prices and increased total costs and expenses.
As of June 30, ConocoPhillips had $4.9 billion in cash and cash equivalents. The company had a total long-term debt of $23.1 billion and a short-term debt of $414 million as of the same date. Capital expenditure and investments totaled $3.29 billion. Net cash provided by operating activities was $3.5 billion.
Natural gas producer EQT Corporation (EQT - Free Report) reported adjusted EPS of 45 cents per share, which beat the Zacks Consensus Estimate of 44 cents and improved from the year-ago reported loss of 8 cents. The strong quarterly earnings were driven by higher sales volume and increased average realized prices. In the June quarter, EQT produced 568.2 billion cubic feet (Bcfe) of natural gas, higher than 507.5 Bcfe in the prior-year quarter. The production volumes, however, marginally missed our estimate of 569.3 Bcfe.
Natural gas contributed about 94% of EQT’s total production, amounting to 534.4 Bcf. Although this was slightly below our estimate of 535.3 Bcf, it increased from the previous year's 474.1 Bcf. The year-over-year growth was driven by strong well performance.