A month has gone by since the last earnings report for Apache Corporation (APA. Shares have added about 7% in that time frame.
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 the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Apache reported fourth-quarter earnings per share – excluding one-time items – of 33 cents, ahead of the Zacks Consensus Estimate of 21 cents. The bottom line also turned around from the year-ago adjusted loss of 6 cents. The outperformance stems from higher oil realizations, and lower cost.
Revenues of $1,586 million were above the Zacks Consensus Estimate of $1,540 million and was 9.3% above the fourth-quarter 2016 sales of $1,451 million.
Operational Performance
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 362,251 oil-equivalent barrels per day (BOE/d) (68% liquids), essentially flat from last year. Apache’s production for oil and natural gas liquids (NGLs) was 246,672 barrels per day (Bbl/d), while natural gas output came in at 693,477 thousand cubic feet per day (Mcf/d).
The company aims to grow production by 7-13% in the next year.
The average realized crude oil price during the fourth quarter was $58.36 per barrel, representing an increase of 23.1% from the year-ago realization of $47.39. Moreover, the average realized natural gas price during the December quarter of 2017 was $2.90 per thousand cubic feet (Mcf), up 1.8% from the year-ago period.
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Dec 31, 2017, Apache had approximately $1,668 million in cash and cash equivalents. The company had a long-term debt of $7,934 million, representing a debt-to-capitalization ratio of 51.7%.
During the oil rout, Apache aligned its spending plans with the low-price environment.
But Apache has since then increase its capital investment after achieving cost rationalization. With returns-focused growth in mind, Apache shelled out $3,089 million in 2017, representing a 75% increase over its 2016 spend. Keeping with the company’s planned shift in strategic objective, Apache’s oil and gas capital investments are set to total $3000 million during this year.
Apache’s fourth quarter lease operating expenses totaled $334 million, down 10.9% from the year-ago quarter. Moreover, total costs and expenses fell 16.4% from the fourth quarter of 2016 to $1,308 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to two lower.
VGM Scores
At this time, APA has an average Growth Score of C. Its Momentum is doing a bit better with a B. The stock was also 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and momentum investors while growth investors may want to look elsewhere.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Apache (APA) Up 7% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Apache Corporation (APA. Shares have added about 7% in that time frame.
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 the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Apache reported fourth-quarter earnings per share – excluding one-time items – of 33 cents, ahead of the Zacks Consensus Estimate of 21 cents. The bottom line also turned around from the year-ago adjusted loss of 6 cents. The outperformance stems from higher oil realizations, and lower cost.
Revenues of $1,586 million were above the Zacks Consensus Estimate of $1,540 million and was 9.3% above the fourth-quarter 2016 sales of $1,451 million.
Operational Performance
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 362,251 oil-equivalent barrels per day (BOE/d) (68% liquids), essentially flat from last year. Apache’s production for oil and natural gas liquids (NGLs) was 246,672 barrels per day (Bbl/d), while natural gas output came in at 693,477 thousand cubic feet per day (Mcf/d).
The company aims to grow production by 7-13% in the next year.
The average realized crude oil price during the fourth quarter was $58.36 per barrel, representing an increase of 23.1% from the year-ago realization of $47.39. Moreover, the average realized natural gas price during the December quarter of 2017 was $2.90 per thousand cubic feet (Mcf), up 1.8% from the year-ago period.
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Dec 31, 2017, Apache had approximately $1,668 million in cash and cash equivalents. The company had a long-term debt of $7,934 million, representing a debt-to-capitalization ratio of 51.7%.
During the oil rout, Apache aligned its spending plans with the low-price environment.
But Apache has since then increase its capital investment after achieving cost rationalization. With returns-focused growth in mind, Apache shelled out $3,089 million in 2017, representing a 75% increase over its 2016 spend. Keeping with the company’s planned shift in strategic objective, Apache’s oil and gas capital investments are set to total $3000 million during this year.
Apache’s fourth quarter lease operating expenses totaled $334 million, down 10.9% from the year-ago quarter. Moreover, total costs and expenses fell 16.4% from the fourth quarter of 2016 to $1,308 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to two lower.
Apache Corporation Price and Consensus
Apache Corporation Price and Consensus | Apache Corporation Quote
VGM Scores
At this time, APA has an average Growth Score of C. Its Momentum is doing a bit better with a B. The stock was also 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and momentum investors while growth investors may want to look elsewhere.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, APA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.