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Anadarko Petroleum (APC) Down 4.4% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Anadarko Petroleum (APC - Free Report) . Shares have lost about 4.4% 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 the most recent earnings report in order to get a better handle on the important drivers.

Anadarko Petroleum Misses Earnings Estimates in Q4

Anadarko Petroleum delivered fourth-quarter 2018 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 57 cents by 33.33%.

On a GAAP basis, the bottom line was 21 cents per share, up from prior-year quarter’s figure of $1.80.

Total Revenues

In the reported quarter, revenues amounted to $3,349 million. The figure missed the Zacks Consensus Estimate of $3,475 million by 3.6%. Nevertheless, the top line increased 14.3% year over year. The upside was primarily driven by higher oil and natural gas sales.

In 2018, the company reported revenues of $ 13,382 million, up 12.4% year over year.

Operational Highlights

In the quarter under review, the company’s average daily sales volume was 701,000 barrels of oil equivalent per day (BOE/d) up 10% year over year. U.S. Onshore assets delivered sales volumes of 457,000 BOE/d on a divestiture-adjusted basis, up 17.2% from the prior-year quarter’s tally.

The company’s total costs and expenses in the fourth quarter increased 19.4% year over year to $3,079 million, primarily owing to higher oil and gas operating as well as transportation, depreciation, depletion and  amortization along with impairments expenses.

Interest expenses came in at $244 million, down 3.2% from $252 million in the year-earlier quarter.

Financial Condition

Anadarko Petroleum had cash and cash equivalents of $1,295 million as of Dec 31, 2018, down from $4,553 million as of Dec 31, 2017.

Long-term debt as of Dec 31, 2018 was $15,470 million, reflecting a decline from $15,547 million as of Dec 31, 2017.

The company’s net cash flow from operating activities during the quarter under consideration was $1,627 million compared with $1,390 million in the prior-year quarter.

Guidance

Anadarko Petroleum expects average daily oil sales volume in the range of 667,000-711,000 BOE/d for the first quarter of 2019.

It expects capital expenditure in the range of $1,100-$1,300 million for first-quarter 2019.

Anadarko Petroleum anticipates an average daily oil sales volume in the band of 712,000-740,000 BOE/d for 2019.

It projects 2019 capital expenditure between $4,300 million and $4,700 million.

 

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 -29.39% due to these changes.

VGM Scores

At this time, Anadarko Petroleum has a strong 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 C on the value side, putting it in the middle 20% 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. It's no surprise Anadarko Petroleum has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.




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