Back to top

Image: Bigstock

APA Corporation Q3 Earnings on Deck: Here's How It Will Fare

Read MoreHide Full Article

Key Takeaways

  • APA is expected to report Q3 profit of $0.74 per share on $2.04 billion in revenues.
  • Revenues are expected to decline 19.52% year over year, indicating weaker hydrocarbon sales.
  • Total expenses are forecasted to drop 49.2%, with major cost reductions across key segments.

APA Corporation (APA - Free Report) is set to release third-quarter results on Nov. 5. The bottom-line estimate for the to-be-reported quarter is pegged at 74 cents on revenues of $2.04 billion.

Let us delve into the factors that might have influenced this upstream operator’s results in the quarter. Before diving in, it is important to consider how APA performed last quarter.

Highlights of APA’s Q2 Earnings & Surprise History

In the last reported quarter, the independent oil and gas explorer beat the consensus mark due to higher-than-expected production and lower costs. APA posted adjusted earnings per share of 87 cents, which beat the Zacks Consensus Estimate of 45 cents. Moreover, revenues of $2.6 billion beat the Zacks Consensus Estimate by more than 26%.

The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed in the other two, resulting in an average surprise of 24.89%.

This is depicted in the graph below:

APA Corporation Price, Consensus and EPS Surprise

APA Corporation Price, Consensus and EPS Surprise

APA Corporation price-consensus-eps-surprise-chart | APA Corporation Quote

APA’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter 2025 earnings has seen one upward revision, but remained unchanged on the downside over the past seven days. The estimated figure indicates a 26% decline year over year. The Zacks Consensus Estimate for revenues indicates a 19.52% year-over-year deterioration.

Factors to Consider Ahead of APA’s Q3 Release

APA Corporation is an independent energy company engaged in the exploration and production of oil and natural gas. Its core activities include identifying, developing and extracting crude oil, natural gas and natural gas liquids. The company maintains significant operational footprints in the United States, Egypt and the North Sea, while actively expanding its exploration efforts in Suriname. APA generates revenues through the sale of its hydrocarbon output, with earnings closely tied to production levels and prevailing market prices for oil and gas.

APA's revenues are likely to have suffered in the quarter to be reported. The Zacks Consensus Estimate for third-quarter revenues is down from the year-ago quarter’s $2.54 billion. According to our model, revenues from the company’s core oil, natural gas and natural gas liquids segment are predicted to drop 26.1% year over year. Additionally, APA is likely to see a 27.2% decline in revenues from purchased oil and gas sales, further weighing on its top line for the quarter.

The reduction in APA's costs is likely to have positively impacted its bottom line. The company's total expenses are expected to reach $1.46 billion in the third quarter, a 49.2% decrease from the same period last year. Notably, lease operating expenses are projected to fall from $418 million to $405 million. Similarly, gathering, processing and transmission costs are expected to decline from $123 million to $95.4 million. The cost of purchased oil and gas is also anticipated to drop significantly, from $292 million to $163.8 million over the same period.

What Does Our Model Say About APA?

The proven Zacks model does not conclusively predict an earnings beat for APA this season. 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. This is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

APA’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is 0.00%.

APA’s Zacks Rank:  APA currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this season.

Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +1.55% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural is a leading Canadian energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids across North America, the North Sea and offshore Africa.

The company is set to release its earnings on Nov. 6. Canadian Natural’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed in one, resulting in an average surprise of 7.12%. Valued at around $65.26 billion, Canadian Natural’s shares have lost 9.3% in a year.

Kimbell Royalty (KRP - Free Report) has an Earnings ESP of +20.73% and a Zacks Rank #3. It is a U.S.-based oil and gas royalty company that owns mineral and royalty interests in more than 100,000 wells across major onshore basins, generating revenues from production without operating costs. Kimbell Royalty is set to release its earnings on Nov. 6.

The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed in the other two, resulting in an average negative surprise of 50.06%. Valued at around $1.44 billion, Kimbell Royalty’s shares have lost 16.4% in a year.

Delek US Holdings (DK - Free Report) has an Earnings ESP of +98.57% and a Zacks Rank #3. The company is set to release its earnings on Nov. 7. Delek US Holdings is a diversified downstream energy company involved in petroleum refining, logistics and retail operations, primarily serving markets in the southern United States.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed in one, resulting in an average surprise of 16.06%. Valued at around $2.25 billion, Delek US Holdings’ shares have gained 121% in a year.

Published in