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Apache (APA) Down 8.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Apache (APA - Free Report) . Shares have lost about 8.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Apache 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 catalysts.
APA Posts Narrower-Than-Expected Q4 Loss, Sales Beat Mark
U.S. energy explorer APA reported fourth-quarter 2020 loss per share — excluding one-time items — of 5 cents, narrower than the Zacks Consensus Estimate of a loss of 8 cents. The outperformance reflects robust domestic production and a tight leash on costs. Precisely, the average daily U.S. output came in at 232,975 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 230,000 BOE/d.
However, APA’s bottom line compared unfavorably with the year-earlier quarter's adjusted earnings of 8 cents due to sharply lower oil prices.
Revenues of $1.2 billion outpaced the Zacks Consensus Estimate of $1 billion million but fell 29.5% from the year-ago quarter’s sales of $1.7 billion.
Production & Selling Prices
Production of oil and natural gas averaged 410,758 BOE/d, which comprises 65% liquids. The figure slid 16% from the year-ago quarter.
The U.S. output (accounting for 57% of the total) fell 22% year over year to 232,975 BOE/d while production from the company’s international operations decreased 6% to 177,783 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 266,474 barrels per day (Bbl/d). Natural gas output totaled 865,704 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the fourth quarter was $43.21 per barrel, down 28% from the year-ago realization of $60.19. However, the number came ahead of the Zacks Consensus Estimate of $40.94. Meanwhile, the average realized natural gas price increased to $2.27 per thousand cubic feet (Mcf) from $2.05 in the year-ago period and topped the Zacks Consensus Estimate of $2.19.
Costs & Financial Position
APA’s fourth-quarter lease operating expenses totaled $269 million, down 22% from the year-ago period. Moreover, total operating expenses plunged 75% from the corresponding period of 2019 to $1.2 billion. Apart from a significant drop in lease operating expenses, the improvement came on the back of lower depreciation and amortization expenses and the absence of the year-ago quarter’s impairment charges.
During the quarter under review, APA generated $498 million of cash from operating activities while incurred $189 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $500 million in the fourth quarter.
As of Dec 31, APA had approximately $262 million in cash and cash equivalents, and $8.1 billion in long-term debt.
Guidance
The company provided guidance of $1.1 billion upstream capital expenditure this year, up from $988 million spent in 2020. Importantly, APA expects to self-fund its capital expenditure with internally generated cash flows. This assumes WTI price of $45 and natural gas price of $3. Further, APA is projecting a marginal (approximately 1%) decrease in adjusted oil production from the fourth quarter of 2020 to fourth quarter of 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 9.14% due to these changes.
VGM Scores
Currently, Apache has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Apache 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) Down 8.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Apache (APA - Free Report) . Shares have lost about 8.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Apache 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 catalysts.
APA Posts Narrower-Than-Expected Q4 Loss, Sales Beat Mark
U.S. energy explorer APA reported fourth-quarter 2020 loss per share — excluding one-time items — of 5 cents, narrower than the Zacks Consensus Estimate of a loss of 8 cents. The outperformance reflects robust domestic production and a tight leash on costs. Precisely, the average daily U.S. output came in at 232,975 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 230,000 BOE/d.
However, APA’s bottom line compared unfavorably with the year-earlier quarter's adjusted earnings of 8 cents due to sharply lower oil prices.
Revenues of $1.2 billion outpaced the Zacks Consensus Estimate of $1 billion million but fell 29.5% from the year-ago quarter’s sales of $1.7 billion.
Production & Selling Prices
Production of oil and natural gas averaged 410,758 BOE/d, which comprises 65% liquids. The figure slid 16% from the year-ago quarter.
The U.S. output (accounting for 57% of the total) fell 22% year over year to 232,975 BOE/d while production from the company’s international operations decreased 6% to 177,783 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 266,474 barrels per day (Bbl/d). Natural gas output totaled 865,704 thousand cubic feet per day (Mcf/d).
The average realized crude oil price during the fourth quarter was $43.21 per barrel, down 28% from the year-ago realization of $60.19. However, the number came ahead of the Zacks Consensus Estimate of $40.94. Meanwhile, the average realized natural gas price increased to $2.27 per thousand cubic feet (Mcf) from $2.05 in the year-ago period and topped the Zacks Consensus Estimate of $2.19.
Costs & Financial Position
APA’s fourth-quarter lease operating expenses totaled $269 million, down 22% from the year-ago period. Moreover, total operating expenses plunged 75% from the corresponding period of 2019 to $1.2 billion. Apart from a significant drop in lease operating expenses, the improvement came on the back of lower depreciation and amortization expenses and the absence of the year-ago quarter’s impairment charges.
During the quarter under review, APA generated $498 million of cash from operating activities while incurred $189 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $500 million in the fourth quarter.
As of Dec 31, APA had approximately $262 million in cash and cash equivalents, and $8.1 billion in long-term debt.
Guidance
The company provided guidance of $1.1 billion upstream capital expenditure this year, up from $988 million spent in 2020. Importantly, APA expects to self-fund its capital expenditure with internally generated cash flows. This assumes WTI price of $45 and natural gas price of $3. Further, APA is projecting a marginal (approximately 1%) decrease in adjusted oil production from the fourth quarter of 2020 to fourth quarter of 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 9.14% due to these changes.
VGM Scores
Currently, Apache has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Apache has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.