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Anadarko Petroleum (APC) Down 1.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Anadarko Petroleum (APC - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Anadarko Petroleum due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Anadarko Q3 Earnings Miss, Revenues Beat Estimates

Anadarko Petroleum’s third-quarter 2018 earnings of 82 cents per share missed the Zacks Consensus Estimate of 88 cents by 6.8%. However, the figure improved from the year-ago quarter’s loss of 77 cents.

On a GAAP basis, Anadarko Petroleum’s bottom line was 72 cents per share, against the prior-year quarter’s loss of $1.27.

Total Revenues

In the reported quarter, Anadarko Petroleum’s revenues of $3,697 million surpassed the Zacks Consensus Estimate of $3,453 million by 7.1%. Also, the top line soared 48.1% year over year. This strong performance was primarily driven by expanded U.S. onshore oil volumes.

Operational Highlights

In the quarter under review, the company’s average daily sales volume was 682,000 barrels of oil equivalent per day (BOE/d) up 8.9% year over year. U.S. Onshore assets delivered sales volumes of 431,000 BOE/d on a divestiture-adjusted basis, an increase of 21.8% from the prior-year period.

The company’s total costs and expenses in the third quarter declined 16.2% year over year to $2,718 million, primarily owing to lower exploration plus Oil and Gathering, processing and marketing expenses.

Interest expenses came in at $240 million, increasing 4.4% from $230 million in the year-earlier quarter.

Financial Condition

Anadarko Petroleum had cash and cash equivalents of $1,883 million as of Sep 30, 2018, down substantially from $4,553 million as of Dec 31, 2017.

Long-term debt as of Sep 30, 2018 was $15,755 million, reflecting a rise from $15,547 million as of Dec 31, 2017.

The company’s net cash flow from operating activities during the quarter under consideration was $1,647 million compared with $639 million recorded in the prior-year period.

Guidance

Anadarko Petroleum expects average daily oil sales volume in the range of 674,000-728,000 BOE/d for the fourth quarter of 2018.

It expects capital expenditure in the band of $650-$950 million for fourth-quarter 2018.

Anadarko Petroleum anticipates an average daily oil sales volume in the band of 658,000-671,000 BOE/d for 2018.

It estimates 2018 capital expenditure between $4,500 million and $4,800 million. This capex view is after excluding $176 million for Powder River Basin acquisitions.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -26.93% due to these changes.

VGM Scores

Currently, Anadarko Petroleum has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Anadarko Petroleum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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